Debt

12 Months Ended

Jan. 30, 2021

Debt and Credit Facilities

Long-term debt recorded on the Consolidated Balance Sheets consists of the following:


($ in millions)	January 30, 2021		February 1, 2020
2021 Notes	$	—	$	1,249
2023 Notes	500		—
2025 Notes	750		—
2027 Notes	1,000		—
Less: Unamortized debt issuance costs	(34)		—
Total long-term debt	$	2,216	$	1,249

In June 2020, we redeemed our $1.25 billion aggregate principal amount of 5.95 percent notes due April 2021 (the "2021 Notes"). We incurred a loss on extinguishment of debt of $58 million, primarily related to the make-whole premium, which was recorded on the Consolidated Statement of Operations. Prior to redeeming our 2021 Notes, the aggregate principal amount of the 2021 Notes was recorded within long-term debt on the Consolidated Balance Sheets, net of the unamortized discount. Following the redemption, our obligations under the 2021 Notes were discharged.

In May 2020, we completed the issuance of the Notes in a private placement to qualified buyers and received gross proceeds of $2.25 billion. Concurrently with the issuance of the Notes, the Company amended the existing unsecured revolving credit facility with the ABL Facility which is scheduled to expire in May 2023. During the second quarter of fiscal 2020, we paid and recorded debt issuance costs related to the Notes and ABL Facility within long-term debt and other long-term assets on the Consolidated Balance Sheet, which will continue to be amortized through interest expense over the life of the related instruments.

The scheduled maturity of the Notes is 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.

As of January 30, 2021, the estimated fair value of the Notes was $2.58 billion and was based on the quoted market price for each of the Notes (level 1 inputs) as of the last business day of the fiscal quarter. The aggregate principal amount of the Notes is recorded within long-term debt on the Consolidated Balance Sheet, net of the unamortized debt issuance cost.

The ABL Facility has a $1.8675 billion borrowing capacity and bears interest at a base rate (typically LIBOR) plus a margin depending on borrowing base availability. We also have the ability to issue letters of credit on our ABL Facility. As of January 30, 2021, we had $53 million in standby letters of credit issued under the ABL Facility. There were no borrowings under the ABL Facility as of January 30, 2021.

The Notes are secured by the Company's real and intellectual property and equipment and intangibles. 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 Notes are also subject to certain provisions related to default that, if triggered, could result in acceleration of the maturity of the Notes. The Notes are guaranteed on a senior secured basis, jointly and severally, by the Company’s existing and future direct and indirect domestic subsidiaries that guarantee the ABL Facility.

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 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 Facility includes, as a financial covenant, a springing fixed charge coverage ratio which arises when availability falls below a specified threshold.

As of January 30, 2021, we were in compliance with the applicable financial covenants and expect to maintain compliance 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”). The Foreign Facilities are uncommitted and had a total capacity of $60 million as of January 30, 2021. As of January 30, 2021, there were no borrowings under the Foreign Facilities. There were $16 million in bank guarantees issued and outstanding primarily related to store leases under the Foreign Facilities as of January 30, 2021.

We have bilateral unsecured standby letter of credit agreements that are uncommitted and do not have expiration dates. There were no material standby letters of credit issued under these agreements as of January 30, 2021.