Subsequent Events

3 Months Ended

May 02, 2020

Subsequent Events

On May 7, 2020, we completed the issuance of our 2023 Notes, 2025 Notes, and 2027 Notes and received gross proceeds of $2.25 billion in a private placement to qualified buyers. On May 7, 2020, concurrent with the issuance of the Notes, we incurred approximately $43 million of underwriting and other fees, which effectively reduced the proceeds we received from the issuance of the Notes. The scheduled maturity and principal amount of the Notes are as follows:



Scheduled Maturity ($ in millions)	Principal		Interest Rate		Interest Payments
Senior Secured Notes (1)
May 15, 2023	$	500	8.375	%	Semi-Annual
May 15, 2025	750		8.625	%	Semi-Annual
May 15, 2027	1,000		8.875	%	Semi-Annual
Total issuance	$	2,250

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(1)	Includes an option to call the Notes in whole or in part at any time, subject to a make whole premium.

The Notes are secured by the Company’s real and intellectual property and equipment and intangibles. On May 7, 2020, we also entered into the ABL Facility in an initial aggregate principal amount of up to $1.8675 billion. The ABL Facility bears interest at a base rate (typically LIBOR) plus a margin depending on borrowing base availability. The ABL Facility agreement is secured by specified assets, including a first lien on inventory, accounts receivable and bank accounts. The Notes are also secured by a second priority lien on certain assets securing the ABL Facility, which includes security interests in inventory, accounts receivable and bank accounts, subject to certain exceptions and permitted liens. In addition, the ABL Facility agreement is secured by a second lien on certain assets securing the Notes.

The Notes contain covenants that limit the Company’s ability to, among other things: (i) grant or incur liens on the collateral; (ii) incur, assume or guarantee additional indebtedness; (iii) enter into sale and lease-back transactions; (iv) sell or otherwise dispose of assets that are collateral; and (v) make certain restricted payments or other investments.

The ABL Facility contains customary covenants restricting the Company’s activities, as well as those of its subsidiaries, including limitations on the ability to sell assets, engage in mergers, or other fundamental changes, enter into capital leases or certain leases not in the ordinary course of business, enter into transactions involving related parties or derivatives, incur or prepay indebtedness, grant liens or negative pledges on its assets, make loans or other investments, pay dividends or repurchase stock or other securities, guarantee third-party obligations, engage in sale and lease-back transactions and make changes in its corporate structure. There are exceptions to these covenants, and some are only applicable when unused availability falls below specified thresholds. In addition, the ABL Credit Agreement includes, as a financial covenant, a springing fixed charge coverage ratio which arises when availability falls below a specified threshold.

On June 6, 2020, we redeemed our 2021 Notes and paid the required make-whole premium. Following the redemption, our obligations under the 2021 Notes were discharged.