Debt and Credit Facilities

3 Months Ended

Apr. 29, 2023

Debt Disclosure [Abstract]

Debt and Credit Facilities

Debt and Credit Facilities

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

($ in millions)	April 29, 2023		January 28, 2023		April 30, 2022
2029 Notes	750		750		750
2031 Notes	750		750		750
Less: Unamortized debt issuance costs	(13)		(14)		(15)
Total long-term debt	$	1,487	$	1,486	$	1,485

The scheduled maturity of the Senior Notes is as follows:

Scheduled Maturity ($ in millions)	Principal		Interest Rate		Interest Payments
October 1, 2029 (1)	$	750	3.625	%	Semi-Annual
October 1, 2031 (2)	750		3.875	%	Semi-Annual
Total issuance	$	1,500

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(1)Includes an option to redeem the 2029 Notes, in whole or in part at any time, subject to a make-whole premium, prior to October 1, 2024. On or after October 1, 2024, includes an option to redeem the 2029 Notes, in whole or in part at any time, at stated redemption prices.

(2)Includes an option to redeem the 2031 Notes, in whole or in part at any time, subject to a make-whole premium, prior to October 1, 2026. On or after October 1, 2026, includes an option to redeem the 2031 Notes, in whole or in part at any time, at stated redemption prices.

On September 27, 2021, we completed the issuance of $1.5 billion aggregate principal amount of 3.625 percent senior notes due 2029 (“2029 Notes”) and 3.875 percent senior notes due 2031 (“2031 Notes”) (the 2029 Notes and the 2031 Notes, collectively, the “Senior Notes”). As of April 29, 2023, the aggregate estimated fair value of the Senior Notes was $1.05 billion and was based on the quoted market prices for each of the Senior Notes (level 1 inputs) as of the last business day of the fiscal quarter. The aggregate principal amount of the Senior Notes is recorded in long-term debt on the Condensed Consolidated Balance Sheets, net of the unamortized debt issuance costs.

On May 7, 2020, we entered into a senior secured asset-based revolving credit agreement (the "ABL Facility"), which was previously scheduled to expire in May 2023. On July 13, 2022, we entered into an amendment and restatement of the ABL Facility. Among other changes, the amendment and restatement extended the maturity of the ABL Facility to July 2027, increased the borrowing capacity from $1.8675 billion to $2.2 billion, modified the reference rate from the London Interbank Offered Rate ("LIBOR") to the Secured Overnight Financing Rate ("SOFR"), and reduced the applicable interest rate margin. Following the amendment and restatement, the ABL Facility generally bears interest at a per annum rate based on SOFR (subject to a zero floor) plus a margin, depending on borrowing base availability. The ABL Facility is available for working capital, capital expenditures, and other general corporate purposes.

As of April 29, 2023, the Company's outstanding borrowing under the ABL Facility was $350 million. The variable interest rate on the drawn amount is adjusted SOFR (calculated to include a 0.10% credit adjustment spread) plus a margin of 1.25%. The borrowing was recorded in long-term liabilities on the Condensed Consolidated Balance Sheet as of April 29, 2023.

On May 15, 2023, the Company repaid $100 million of the outstanding borrowing under the ABL Facility, which reduced the outstanding borrowing to $250 million.

We also have the ability to issue letters of credit on our ABL Facility. As of April 29, 2023, we had $49 million in standby letters of credit issued under the ABL Facility.

Following the closing of the Gap China transaction with Baozun Inc. ("Baozun") on January 31, 2023, the respective Gap China credit facilities were terminated. See Note 12 of Notes to Condensed Consolidated Financial Statements for related disclosures.