Long-term Debt and Borrowing Facilities

The following table provides the Company’s outstanding debt balance, net of unamortized debt issuance costs and discounts, as of November 3, 2018, February 3, 2018 and October 28, 2017:



	November 3, 2018			February 3, 2018			October 28, 2017
	(in millions)
Senior Debt with Subsidiary Guarantee
$1 billion, 6.875% Fixed Interest Rate Notes due November 2035 (“2035 Notes”)	$	990		$	990		$	990
$956 million, 5.625% Fixed Interest Rate Notes due February 2022 (“2022 Notes”)	951			994			993
$780 million, 6.625% Fixed Interest Rate Notes due April 2021 (“2021 Notes”)	776			994			994
$700 million, 6.75% Fixed Interest Rate Notes due July 2036 (“2036 Notes”)	693			693			692
$500 million, 5.625% Fixed Interest Rate Notes due October 2023 (“2023 Notes”)	498			497			497
$500 million, 5.25% Fixed Interest Rate Notes due February 2028 (“2028 Notes”)	495			495			—
$500 million, 8.50% Fixed Interest Rate Notes due June 2019 (“2019 Notes”) (a)	—			—			496
$338 million, 7.00% Fixed Interest Rate Notes due May 2020 (“2020 Notes”)	337			398			398
$297 million, 6.694% Fixed Interest Rate Notes due January 2027 (“2027 Notes”)	273			—			—
Secured Revolving Facility	85			—			—
Secured Foreign Facilities	94			1			—
Total Senior Debt with Subsidiary Guarantee	$	5,192		$	5,062		$	5,060
Senior Debt
$350 million, 6.95% Fixed Interest Rate Debentures due March 2033 (“2033 Notes”)	$	348		$	348		$	348
$300 million, 7.60% Fixed Interest Rate Notes due July 2037 (“2037 Notes”)	297			297			297
Unsecured Foreign Facilities	33			87			80
Total Senior Debt	$	678		$	732		$	725
Total	$	5,870		$	5,794		$	5,785
Current Debt	(56		)	(87		)	(80		)
Total Long-term Debt, Net of Current Portion	$	5,814		$	5,707		$	5,705

________________


(a)	The balance includes a fair value interest rate hedge adjustment which increased the debt balance by $1 million as of October 28, 2017.

Exchange of Notes

In June 2018, the Company completed private offers to exchange $62 million, $220 million and $44 million of outstanding 2020 Notes, 2021 Notes and 2022 Notes, respectively, for $297 million of newly issued 6.694% notes due in January 2027 and $52 million in cash consideration, which included a $24 million exchange premium. The exchange was treated as a modification under ASC 470, Debt, and no gain or loss was recognized. The exchange premium will be amortized through the maturity date of January 2027 and is included within Long-term Debt on the November 3, 2018 Consolidated Balance Sheet. The obligation to pay principal and interest on the 2027 Notes is jointly and severally guaranteed on a full and unconditional basis by certain of the Company's 100% owned subsidiaries (the “Guarantors”).

Issuance of Notes

In January 2018, the Company issued $500 million of 5.25% notes due in February 2028. The obligation to pay principal and interest on these notes is jointly and severally guaranteed on a full and unconditional basis by the Guarantors. The proceeds from the issuance were $495 million, which were net of issuance costs of $5 million. These issuance costs are being amortized through the maturity date of February 2028 and are included within Long-term Debt on the November 3, 2018 and February 3, 2018 Consolidated Balance Sheets.

Redemption of Notes

In January 2018, the Company used the proceeds from the 2028 Notes to redeem the $500 million 2019 Notes for $540 million. In the fourth quarter of 2017, the Company recognized a pre-tax loss on extinguishment of this debt of $45 million (after-tax loss of $29 million), which includes write-offs of unamortized issuance costs and discounts and losses related to terminated interest rate swaps associated with the 2019 Notes.

Secured Revolving Facility

The Company and the Guarantors guarantee and pledge collateral to secure a revolving credit facility ("Secured Revolving Facility"). The Secured Revolving Facility has aggregate availability of $1 billion and expires in May 2022. The Secured Revolving Facility allows the Company and certain of the Company's non-U.S. subsidiaries to borrow and obtain letters of credit in U.S. dollars, Canadian dollars, Euros, Hong Kong dollars or British pounds.

The Secured Revolving Facility fees related to committed and unutilized amounts are 0.25% per annum, and the fees related to outstanding letters of credit are 1.50% per annum. In addition, the interest rate on outstanding U.S. dollar borrowings is the London Interbank Offered Rate (“LIBOR”) plus 1.50% per annum. The interest rate on outstanding foreign denominated borrowings is the applicable benchmark rate plus 1.50% per annum.

The Secured Revolving Facility contains fixed charge coverage and debt to EBITDA financial covenants. The Company is required to maintain a fixed charge coverage ratio of not less than 1.75 to 1.00 and a consolidated debt to consolidated EBITDA ratio not exceeding 4.00 to 1.00 for the most recent four-quarter period. In addition, the Secured Revolving Facility provides that investments and restricted payments may be made, without limitation on amount, if (a) at the time of and after giving effect to such investment or restricted payment, the ratio of consolidated debt to consolidated EBITDA for the most recent four-quarter period is less than 3.00 to 1.00 and (b) no default or event of default exists. As of November 3, 2018, the Company was in compliance with both of its financial covenants, and the ratio of consolidated debt to consolidated EBITDA was less than 3.00 to 1.00.

During the third quarter of 2018, the Company borrowed $85 million under the Secured Revolving Facility. As of November 3, 2018, this borrowing is included within Long-term Debt on the Consolidated Balance Sheet.

The Secured Revolving Facility supports the Company’s letter of credit program. The Company had $9 million of outstanding letters of credit as of November 3, 2018 that reduced its remaining availability under the Secured Revolving Facility.

Secured Foreign Facilities

The Company and the Guarantors guarantee and pledge collateral to secure revolving and term loan bank facilities ("Secured Foreign Facilities") used by certain of the Company's Greater China subsidiaries to support their operations. The Secured Foreign Facilities, which allow borrowings in U.S. dollars and Chinese Yuan, have availability totaling $100 million. The interest rates on outstanding borrowings are based upon the applicable benchmark rate for the currency of each borrowing. For year-to-date 2018, the Company borrowed $94 million and made payments of $1 million under the Secured Foreign Facilities. The maximum daily amount outstanding at any point in time in 2018 was $94 million. Borrowings on the Secured Foreign Facilities mature between November 2018 and May 2022. As of November 3, 2018, borrowings of $23 million are included within Current Debt on the Consolidated Balance Sheet and the remaining borrowings are included within Long-term Debt.

Unsecured Foreign Facilities

The Company guarantees unsecured revolving and term loan bank facilities ("Unsecured Foreign Facilities") used by certain of the Company's Greater China subsidiaries to support their operations. The Unsecured Foreign Facilities, which allow borrowings in U.S. dollars and Chinese Yuan, have availability totaling $100 million. The interest rates on outstanding borrowings are based upon the applicable benchmark rate for the currency of each borrowing. For year-to-date 2018, the Company borrowed $16 million and made payments of $70 million under the Unsecured Foreign Facilities. The maximum daily amount outstanding at any point in time in 2018 was $90 million. Borrowings on the Unsecured Foreign Facilities mature between November 2018 and January 2019. As of November 3, 2018, borrowings of $33 million are included within Current Debt on the Consolidated Balance Sheet.