v3.20.4

Debt | 3 Months Ended
--- | ---
Oct. 31, 2020
Debt Disclosure [Abstract] |
Debt | Debt Debt consists of the following:
| October 31, 2020 |  | August 1, 2020
| (millions)
Revolving credit facility | $ | — |  |  | $ | 230.0 |
Less: unamortized debt issuance costs (a) | (6.0) |  |  | (2.1) |
| (6.0) |  |  | 227.9 |
Term loan (b) | 1,421.6 |  |  | 1,271.6 |
Less: unamortized original issue discount (c) | (8.9) |  |  | (8.9) |
unamortized debt issuance costs (c) | (24.1) |  |  | (10.1) |
| 1,388.6 |  |  | 1,252.6 |
Total debt | 1,382.6 |  |  | 1,480.5 |
Less: current portion | — |  |  | (227.9) |
Less: Liabilities subject to compromise (d) | (1,090.2) |  |  | (1,252.6) |
Total long-term debt | $ | 292.4 |  |  | $ | — |
_______ (a) Prior to the Chapter 11 Cases, the unamortized debt issuance costs were amortized on a straight-line basis over the life of the amended revolving credit agreement. (b) The October 31, 2020 Term loan balance includes the $150.0 million in New Money DIP Loans related to the DIP Term Credit Agreement which is discussed in Note 2. The outstanding balance of the DIP Term Credit Agreement is $312.3 million. (c) Prior to the Chapter 11 Cases, the original issue discount and debt issuance costs for the term loan were amortized over the life of the term loan using the interest method based on an imputed interest rate of approximately 6.3%. The October 31, 2020 unamortized debt issuance costs balance includes the debt issuance costs related to the DIP Term Credit Agreement. As of October 31, 2020, the unamortized debt issuance costs related to the DIP Term Credit Agreement were $14.0 million. (d) See Note 2 for additional information. Chapter 11 Cases On July 23, 2020, the Company filed the Chapter 11 Cases, which impacted both the Company’s obligations under the Amended Revolving Credit Agreement and the Term Loan. Following the commencement of the Chapter 11 Cases, the Company is not able to make borrowings under the Amended Revolving Credit Agreement. To replace the Amended Revolving Credit Agreement, the Company entered into the DIP Facilities, which are described in more detail in Note 2. Additionally, as of August 1, 2020, the Term Loan was classified as Liabilities subject to compromise. Refer to Note 2 for additional information. Amended Revolving Credit Agreement (Prior to Chapter 11 Cases) On February 27, 2018, the Company and certain of its domestic subsidiaries entered into an amendment and restatement of its revolving credit agreement dated January 3, 2011, as amended and restated as of June 14, 2012, as of March 13, 2013 and as of July 24, 2015, among the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (the "Amended Revolving Credit Agreement"). The Amended Revolving Credit Agreement provides aggregate revolving commitments up to $500 million, with an optional increase of up to $200 million. The revolving credit facility may be used for the issuance of letters of credit, to fund working capital requirements and capital expenditures, and for general corporate purposes. The revolving credit facility also includes a $200 million letter of credit sublimit, all of which can be used for standby letters of credit pursuant to an amendment to the revolving credit facility dated September 20, 2019, and a $30 million swingline loan sublimit. The interest rates, pricing and fees under the agreement fluctuate based on the average daily availability, as defined therein. The Amended Revolving Credit Agreement has a maturity of the earlier of (i) 5 years from the closing date (or February 2023) or (ii) 91 days prior to the maturity date of the Term Loan (unless (a) the outstanding principal amount of the Term Loan is $150 million or less and (b) the Company maintains liquidity (which can include (1) availability under the revolving credit facility in excess of the greater of $100 million and 20% of the credit limit and (2) cash held in a controlled account of the administrative agent of the revolving credit facility), in an amount equal to the outstanding principal amount of the remaining Term Loan. There are no mandatory reductions in aggregate revolving commitments throughout the term of the Amended Revolving Credit Agreement. However, availability under the revolving credit facility is limited to a percentage of the amount of eligible cash, eligible inventory and eligible credit card accounts receivable as defined in the Amended Revolving Credit Agreement. On September 16, 2020, the Company paid the outstanding $230 million under the Amended Revolving Credit Agreement, which was borrowed during the third quarter of Fiscal 2020. The Company borrowed the funds as a precautionary measure in order to increase its cash position and preserve financial flexibility in light of the current uncertainty in the global financial markets from COVID-19. Throughout the term of the Amended Revolving Credit Agreement, the Company can elect to borrow either Alternative Base Rate Borrowings ("ABR Borrowings") or Eurodollar Borrowings. Eurodollar Borrowings bear interest at a variable rate using the LIBOR for such Interest Period plus an applicable margin ranging from 125 basis points to 150 basis points based on the Company’s average availability during the previous fiscal quarter. ABR Borrowings bear interest at a variable rate determined using a base rate equal to the greatest of (i) prime rate, (ii) federal funds rate plus 50 basis points or (iii) one-month LIBOR plus 100 basis points; plus an applicable margin ranging from 25 basis points to 50 basis points based on the average availability during the previous fiscal quarter. Under the terms of the Amended Revolving Credit Agreement, the unutilized commitment fee ranges from 20 basis points to 25 basis points per annum based on the Company's average utilization during the previous fiscal quarter. Term Loan (Prior to Chapter 11 Cases) In connection with the ANN Acquisition, the Company entered into a $1.8 billion variable-rate term loan (the "Term Loan"), which was issued at a 2% discount and provides for an incremental term facility of $200 million. The Company would also be eligible to borrow an unlimited amount, if it were to maintain a minimum senior secured leverage ratio as defined in the Term Loan (the "Senior Secured Leverage Ratio") among other requirements. The Term Loan matures on August 21, 2022 and its terms require quarterly repayments of $4.5 million during the first half of Fiscal 2017 and $22.5 million thereafter, with a remaining balloon payment of approximately $1.2 billion required at maturity. During Fiscal 2018, the Company made repayments totaling $225 million of which $180.0 million was applied to future quarterly scheduled payments such that the Company is not required to make its next quarterly payment of $22.5 million until November of calendar 2020. In July 2020, the Company used the cash proceeds from the sale of its corporate campus in Mahwah, New Jersey to make a prepayment of $20.4 million. The Company is also required to make mandatory prepayments in connection with certain prepayment events, including (i) commencing with the fiscal year ending July 29, 2017 if the Company has excess cash flow, as defined in the Term Loan, for any fiscal year and the Senior Secured Leverage Ratio for such fiscal year exceeds certain predetermined limits and (ii) from Net Proceeds, as defined in the Term Loan, of asset dispositions and certain casualty events that are greater than $25 million in the aggregate in any fiscal year and not reinvested (or committed to be reinvested) within one year, in each case subject to certain conditions and exceptions. No such mandatory prepayments were due for Fiscal 2020. The Company has the right to prepay the Term Loan in any amount and at any time with no prepayment penalties. At the time of initial borrowings and renewal periods throughout the term of the Term Loan, the Company may elect to borrow either ABR Borrowings or Eurodollar Borrowings. Eurodollar Borrowings bear interest at a variable rate using LIBOR (subject to a 75 basis points floor) plus an applicable margin of 450 basis points. ABR Borrowings bear interest at a variable rate determined using a base rate (subject to a 175 basis points floor) equal to the greatest of (i) prime rate, (ii) federal funds rate plus 50 basis points or (iii) one-month LIBOR plus 100 basis points, plus an applicable margin of 350 basis points. As of July 23, 2020, borrowings under the Term Loan consisted entirely of Eurodollar Borrowings at a rate of 5.25%. The Company entered into an interest rate swap agreement in March 2019 to mitigate some of the risk associated with the variable rate. However, the filing of the Chapter 11 Cases represented an event of default under the terms of the Company’s interest rate swap agreement. Therefore, the counterparty terminated the interest rate swap agreement in the fourth quarter of Fiscal 2020. In the third quarter of Fiscal 2020, the Company performed an additional repurchase of $42.0 million of principal amount of debt for a total purchase price of approximately $28.6 million. This additional repurchase will be settled upon emergence from bankruptcy.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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