Debt And Credit Facilities

12 Months Ended

Jan. 30, 2021

NOTE 8: DEBT AND CREDIT FACILITIES

Debt

A summary of our long-term debt is as follows:


	January 30, 2021	February 1, 2020






Long-term debt, net of unamortized discount:

Senior notes, 4.00%, due October 2021	500	500
Senior notes, 8.75%, due May 2025	600	—
Senior notes, 4.00%, due March 2027	349	349
Senior debentures, 6.95%, due March 2028	300	300
Senior notes, 4.375%, due April 2030	500	500
Senior notes, 7.00%, due January 2038	147	147
Senior notes, 5.00%, due January 2044	900	897
Deferred bond issuance costs	(27)	(17)
Total long-term debt	3,269	2,676

Less: current portion	(500)	—
Total due beyond one year	$2,769	$2,676

Required principal payments on long-term debt are as follows:


Fiscal year
2021			$500
2022			—
2023			—
2024			—
2025			600
Thereafter			2,264

During the first quarter of 2020, we issued $600 aggregate principal amount of 8.750% senior secured notes due May 2025. These notes are guaranteed by certain subsidiaries and secured by various store, distribution center and corporate properties. The 8.750% senior secured notes contain covenants that include limitations on indebtedness, liens, mergers, acquisitions, asset sales, investments, dividend payments and equity distributions, in addition to certain change of control triggering events and provisions for events of default. Any redemption prior to the second quarter of 2022 may require a make-whole premium. Beginning the second quarter of 2022, we will be permitted to prepay all or part of our 8.750% senior secured notes.

Interest Expense

The components of interest expense, net are as follows:


Fiscal year	2020	2019	2018
Interest on long-term debt and short-term borrowings	$199	$151	$146
Less:
Interest income	(3)	(10)	(15)
Capitalized interest	(15)	(39)	(27)
Interest expense, net	$181	$102	$104

Credit Facilities

During the first quarter of 2020, we amended our existing Revolver and drew down $800. As of January 30, 2021, we paid the entirety of the outstanding balance under the facility. The Revolver contains customary representations, warranties, covenants and terms, including paying a variable rate of interest and a commitment fee based on our debt rating. Under the terms of the amendment, if our Leverage Ratio is greater than four or our unsecured debt is rated below BBB- with a stable outlook at Standard & Poor’s or Baa3 with a stable outlook at Moody’s, any borrowings under our Revolver will be secured by substantially all our personal property and we will be subject to asset coverage, fixed charge coverage and minimum liquidity covenants. If our Leverage Ratio is below four and our unsecured debt is rated at or above BBB- with a stable outlook at Standard & Poor’s or Baa3 with a stable outlook at Moody’s, any borrowings under our Revolver will be unsecured, we will not be subject to the above covenants and the restrictions on dividend payments and share repurchases will be removed. Should these covenants not be met, we would have restrictions on borrowing additional debt from the Revolver. As of January 30, 2021, our Leverage Ratio exceeded four and we did not meet or exceed our credit rating threshold. We met all other financial covenant measures for the quarter.

Provided that we obtain written consent from our lenders, we have the option to increase the Revolver by up to $200, to a total of $1,000, and two options to extend the Revolver by one year.

The Revolver expires in September 2023 and is available for working capital, capital expenditures and general corporate purposes. As of January 30, 2021 and February 1, 2020, we had no borrowings outstanding under our Revolver.

Our $800 commercial paper program allows us to use the proceeds to fund operating cash requirements. Under the terms of the commercial paper agreement, we pay a rate of interest based on, among other factors, the maturity of the issuance and market conditions. The issuance of commercial paper has the effect, while it is outstanding, of reducing available liquidity under the Revolver by an amount equal to the principal amount of commercial paper. As of January 30, 2021 and February 1, 2020, we had no issuances outstanding under our commercial paper program.

In 2018, we fully repaid $47 outstanding on our Puerto Rican unsecured borrowing facility and did not renew the facility upon expiration in the fourth quarter of 2018.