Debt and Credit Facilities

3 Months Ended

May 02, 2020

Debt Disclosure [Abstract]

Debt and Credit Facilities

Debt and Credit Facilities

As of May 2, 2020, February 1, 2020, and May 4, 2019, the estimated fair value of our $1.25 billion aggregate principal amount of 5.95 percent notes due April 2021 (the “2021 Notes”) was $1.28 billion, $1.29 billion, and $1.30 billion, respectively, and was based on the quoted market price of the 2021 Notes (level 1 inputs) as of the last business day of the respective fiscal quarter. As of May 2, 2020, we had the intent and ability to refinance the 2021 Notes on a long-term basis therefore the aggregate principal amount of the 2021 Notes is recorded in long-term debt on the Condensed Consolidated Balance Sheets, net of the unamortized discount. On June 6, 2020, we redeemed our 2021 Notes. See Note 12 of Notes to Condensed Consolidated Financial Statements for further information regarding subsequent events.

We also had a $500 million, five-year, revolving credit facility, which was scheduled to expire in May 2023. On March 25, 2020, we drew down the entire amount under the revolving credit facility resulting in a total of $500 million outstanding as of May 2, 2020. The borrowings accrued interest at a base rate (typically LIBOR) plus a margin based on our long-term senior unsecured credit ratings and our leverage ratio. The draw-down proceeds were recorded in revolving credit facility on the Condensed Consolidated Balance Sheet. There were no material outstanding letters of credit under the revolving credit facility as of May 2, 2020.

On May 7, 2020, we completed the offering of $500 million aggregate principal amount of 8.375 percent Senior Secured Notes due 2023 (the "2023 Notes"), $750 million aggregate principal amount of 8.625 percent Senior Secured Notes due 2025 (the "2025 Notes") and $1 billion aggregate principal amount of 8.875 percent Senior Secured Notes due 2027 (the "2027 Notes" and, with the 2023 Notes and the 2025 Notes, the "Notes") in a private placement to qualified buyers. Concurrently with the issuance of the Notes, the Company amended the existing unsecured revolving credit facility with a third amended and restated senior secured asset-based revolving credit agreement (the "ABL Facility"). Additionally, on May 7, 2020, we repaid the $500 million that was outstanding under our existing unsecured revolving credit facility and did not borrow any funds under the ABL Facility. The amended ABL Facility has a $1.8675 billion borrowing capacity and includes revised financial covenant requirements. See Note 12 of Notes to Condensed Consolidated Financial Statements for further information regarding subsequent events.

The Company expects to maintain compliance with the applicable financial covenants for the next twelve months.

We also maintain multiple agreements with third parties that make unsecured revolving credit facilities available for our operations in foreign locations (the “Foreign Facilities”). These Foreign Facilities are uncommitted and are generally available for borrowings, overdraft borrowings, and the issuance of bank guarantees. The total capacity of the Foreign Facilities was $55 million as of May 2, 2020. As of May 2, 2020, there were no borrowings under the Foreign Facilities. There were $17 million in bank guarantees issued and outstanding primarily related to store leases under the Foreign Facilities as of May 2, 2020.

We have bilateral unsecured standby letter of credit agreements that are uncommitted and do not have expiration dates. As of May 2, 2020, we had $20 million in standby letters of credit issued under these agreements.