Long-term Debt and Borrowing Facilities

12 Months Ended

Feb. 01, 2020

Long-term Debt, by Current and Noncurrent [Abstract]

The following table provides the Company’s outstanding debt balance, net of unamortized debt issuance costs and discounts, as of February 1, 2020 and February 2, 2019:



	February 1, 2020			February 2, 2019
	(in millions)
Senior Debt with Subsidiary Guarantee
$1 billion, 6.875% Fixed Interest Rate Notes due November 2035 (“2035 Notes”)	$	991		$	990
$860 million, 5.625% Fixed Interest Rate Notes due February 2022 (“2022 Notes”)	858			952
$700 million, 6.75% Fixed Interest Rate Notes due July 2036 (“2036 Notes”)	693			693
$500 million, 5.625% Fixed Interest Rate Notes due October 2023 (“2023 Notes”)	498			498
$500 million, 5.25% Fixed Interest Rate Notes due February 2028 (“2028 Notes”)	496			496
$500 million, 7.50% Fixed Interest Rate Notes due June 2029 ("2029 Notes")	487			—
$450 million, 6.625% Fixed Interest Rate Notes due April 2021 (“2021 Notes”)	450			776
$297 million, 6.694% Fixed Interest Rate Notes due January 2027 ("2027 Notes")	276			273
$338 million, 7.00% Fixed Interest Rate Notes due May 2020 (“2020 Notes”)	—			337
Secured Foreign Facilities	103			91
Total Senior Debt with Subsidiary Guarantee	$	4,852		$	5,106
Senior Debt
$350 million, 6.95% Fixed Interest Rate Debentures due March 2033 (“2033 Notes”)	$	348		$	348
$300 million, 7.60% Fixed Interest Rate Notes due July 2037 (“2037 Notes”)	298			297
Unsecured Foreign Facilities	50			60
Total Senior Debt	$	696		$	705
Total	$	5,548		$	5,811
Current Debt	(61		)	(72		)
Total Long-term Debt, Net of Current Portion	$	5,487		$	5,739

The following table provides principal payments due on outstanding debt in the next five fiscal years and the remaining years thereafter:



Fiscal Year (in millions)
2020	$	61
2021	459
2022	869
2023	569
2024	5
Thereafter	$	3,648

Cash paid for interest was $363 million in 2019, $380 million in 2018 and $391 million in 2017.

Issuance of Notes

In June 2019, the Company issued $500 million of 7.50% notes due in June 2029. The obligation to pay principal and interest on these notes is jointly and severally guaranteed on a full and unconditional basis by certain of the Company's 100% owned subsidiaries (the “Guarantors”). The proceeds from the issuance were $486 million, which were net of discounts and issuance costs of $14 million. The discounts and issuance costs are being amortized through the maturity date and are included within Long-term Debt on the February 1, 2020 Consolidated Balance Sheet.

Repurchases of Notes

In June 2019, the Company completed the early settlement of tender offers to repurchase $212 million of outstanding 2020 Notes, $330 million of outstanding 2021 Notes and $96 million of outstanding 2022 Notes for $669 million. The Company used the proceeds from the 2029 Notes, together with cash on hand, to fund the purchase price for the tender offers. Additionally, in July 2019, the Company redeemed the remaining $126 million of outstanding 2020 Notes for $130 million.

In the second quarter of 2019, the Company recognized a pre-tax loss on extinguishment of debt of $40 million (after-tax loss of $30 million), which includes redemption fees and the write-off of unamortized issuance costs. This loss is included in Other Income (Loss) in the 2019 Consolidated Statement of Income (Loss).

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 is being amortized through the maturity date of January 2027 and is included within Long-term Debt on the Consolidated Balance Sheets. The obligation to pay principal and interest on the 2027 Notes is jointly and severally guaranteed on a full and unconditional basis by the Guarantors.

Secured Revolving Facility

The Company and the Guarantors guarantee and pledge collateral to secure the Secured Revolving Facility. The Secured Revolving Facility has aggregate availability of $1 billion and 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.

In August 2019, the Company entered into an amendment and restatement of the Secured Revolving Facility. The Amendment maintained the aggregate availability under the Secured Revolving Facility at $1 billion and extended the expiration date from May 2022 to August 2024. The Company incurred fees related to the Amendment of $5 million, which were capitalized and are recorded in Other Assets on the February 1, 2020 Consolidated Balance Sheet and are being amortized over the remaining term of the Secured Revolving Facility.

The Secured Revolving Facility fees related to committed and unutilized amounts are 0.30% per annum, and the fees related to outstanding letters of credit are 1.75% per annum. In addition, the interest rate on outstanding U.S. dollar borrowings is LIBOR plus 1.75% per annum. The interest rate on outstanding foreign denominated borrowings is the applicable benchmark rate plus 1.75% 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. Additionally, 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 3.50 to 1.00 and (b) no default or event of default exists. As of February 1, 2020, the Company was in compliance with both of its financial covenants, and the ratio of consolidated debt to consolidated EBITDA was less than 3.50 to 1.00.

During 2019, the Company borrowed and repaid $12 million under the Secured Revolving Facility. As of February 1, 2020, there were no borrowings outstanding under the Secured Revolving Facility.

The Secured Revolving Facility supports the Company’s letter of credit program. The Company had $19 million of outstanding letters of credit as of February 1, 2020 that reduced its availability under the Secured Revolving Facility.

On March 16, 2020, the Company elected to borrow $950 million from the Secured Revolving Facility, leaving our availability under the Secured Revolving Facility at $22 million. For additional information, see Note 23, "Subsequent Events."

Secured Foreign Facilities

The Company and the Guarantors guarantee and pledge collateral to secure revolving and term loan bank facilities used by certain of the Company's Greater China subsidiaries to support their operations. The Secured Foreign Facilities have availability totaling $150 million. The interest rates on outstanding borrowings are based upon the applicable benchmark rate for each borrowing. During 2019, the Company borrowed $117 million and made payments of $103 million under the Secured Foreign Facilities. The maximum daily amount outstanding at any point in time in 2019 was $103 million. Borrowings on the Secured Foreign Facilities mature between March 2020 and August 2024. As of February 1, 2020, borrowings of $11 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 used by certain of the Company's Greater China subsidiaries to support their operations. The Unsecured Foreign Facilities have availability totaling $75 million. The interest rates on outstanding borrowings are based upon the applicable benchmark rate for each borrowing. During 2019, the Company

borrowed $50 million and made payments of $59 million under the Unsecured Foreign Facilities. The maximum daily amount outstanding at any point in time in 2019 was $74 million. Borrowings on the Unsecured Foreign Facilities mature between March 2020 and April 2020. As of February 1, 2020, borrowings of $50 million are included within Current Debt on the Consolidated Balance Sheet.