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Credit Facilities
12 Months Ended
Feb. 01, 2014
Line of Credit Facility [Abstract]  
CreditFacilityDisclosure [Text Block]
Note 6. Credit Facilities
We have a $500 million, five-year, unsecured revolving credit facility (the "Facility"), which was set to expire in April 2016. On May 1, 2013, the Facility was amended to extend the expiration date to May 2018 and to improve the pricing structure. The Facility is available for general corporate purposes including working capital, trade letters of credit, and standby letters of credit. The Facility fees fluctuate based on our long-term senior unsecured credit ratings and our leverage ratio. If we were to draw on the Facility, interest would be a base rate (typically LIBOR) plus a margin based on our long-term senior unsecured credit ratings and our leverage ratio on the unpaid principal amount. To maintain availability of funds under the Facility, we pay a facility fee on the full facility amount, regardless of usage. As of February 1, 2014, there were no borrowings under the Facility. The net availability of the Facility, reflecting $23 million of outstanding standby letters of credit, was $477 million as of February 1, 2014.
In conjunction with our financings in April 2011 as discussed in Note 5 of Notes to Consolidated Financial Statements, we obtained long-term senior unsecured credit ratings from Moody’s and Fitch. Moody’s assigned a rating of Baa3, and Fitch assigned a rating of BBB-. In fiscal 2013, Standard & Poor’s raised its rating of us to BBB- from BB+. As of February 1, 2014, there were no updates in these credit ratings. Any future change in the Moody’s or Standard & Poor’s ratings would change any future interest expense if we were to draw on the Facility.
We maintain two separate agreements in China (the "China Facilities") to make unsecured revolving credit facilities available for our operations in China; they are uncommitted and are available for borrowings, overdraft borrowings, and the issuance of bank guarantees. The 196 million Chinese yuan China Facilities expired in October 2012 and they were subsequently renewed with an increased availability of 250 million Chinese yuan ($41 million as of February 1, 2014) and no expiration date. As of February 1, 2014, there were no borrowings under the China Facilities. There were 42 million Chinese yuan ($7 million as of February 1, 2014) in bank guarantees primarily related to store leases under the China Facilities as of February 1, 2014. The China Facility agreements do not contain any financial covenants.
We have a bilateral unsecured standby letter of credit agreement that is uncommitted and does not have an expiration date. As of February 1, 2014, we had $50 million in standby letters of credit issued under the agreement. We also have a $50 million, two-year, unsecured committed letter of credit agreement with an expiration date of September 2014. As of February 1, 2014, we had no trade letters of credit issued under this letter of credit agreement.
The Facility and the unsecured committed letter of credit agreement contain financial and other covenants including, but not limited to, limitations on liens and subsidiary debt, as well as the maintenance of two financial ratios—a minimum annual fixed charge coverage ratio of 2.00 and a maximum annual leverage ratio of 2.25. As of February 1, 2014, we were in compliance with all such covenants. Violation of these covenants could result in a default under the Facility and letter of credit agreement, which would permit the participating banks to terminate our ability to access the Facility for letters of credit and advances, terminate our ability to request letters of credit under the letter of credit agreement, require the immediate repayment of any outstanding advances under the Facility, and require the immediate posting of cash collateral in support of any outstanding letters of credit under the letter of credit agreement.