XML 39 R27.htm IDEA: XBRL DOCUMENT v3.21.2
Loans, overdrafts and long-term debt
6 Months Ended
Jul. 31, 2021
Debt Disclosure [Abstract]  
Loans, overdrafts and long-term debt Loans, overdrafts and long-term debt
(in millions)July 31, 2021January 30, 2021August 1, 2020
Debt:
Senior unsecured notes due 2024, net of unamortized discount$147.6 $147.6 $147.6 
ABL revolving facility — 1,090.0 
FILO term loan facility — 100.0 
Other loans and bank overdrafts0.4 — 4.6 
Gross debt$148.0 $147.6 $1,342.2 
Less: Current portion of loans and overdrafts(0.4)— (4.6)
Less: Unamortized debt issuance costs(0.7)(0.9)(1.5)
Total long-term debt$146.9 $146.7 $1,336.1 

Senior unsecured notes due 2024
On May 19, 2014, Signet UK Finance plc (“Signet UK Finance”), a wholly owned subsidiary of the Company, issued $400 million aggregate principal amount of its 4.70% senior unsecured notes due in 2024 (the “Senior Notes”). The Senior Notes were issued under an effective registration statement previously filed with the SEC. The Senior Notes are jointly and severally guaranteed, on a full and unconditional basis, by the Company and by certain of the Company’s wholly owned subsidiaries (such subsidiaries, the “Guarantors”).
On September 5, 2019, Signet UK Finance announced the commencement of a tender offer to purchase any and all of its outstanding Senior Notes (the “Tender Offer”). Upon receipt of the requisite consents from Senior Note holders, Signet UK Finance entered into a supplemental indenture which eliminated most of the restrictive covenants and certain default provisions of the indenture. The supplemental indenture became operative on September 27, 2019 upon the Company’s acceptance and payment for the Senior Notes previously validly tendered and not validly withdrawn pursuant to the Tender Offer for an aggregate principal amount of $239.6 million, which represented a purchase price of $950.00 per $1,000.00 in principal amount of the Senior Notes validly tendered.
Unamortized debt issuance costs relating to the Senior Notes as of July 31, 2021 was $0.7 million (January 30, 2021 and August 1, 2020: $0.9 million and $1.0 million, respectively). The unamortized debt issuance costs are recorded as a direct deduction from the outstanding liability within the condensed consolidated balance sheets. Amortization relating to debt issuance costs of $0.1 million and $0.2 million was recorded as interest expense in the condensed consolidated statements of operations for the 13 and 26 weeks ended July 31, 2021, respectively ($0.0 million and $0.1 million for the 13 and 26 weeks ended August 1, 2020, respectively).
Asset-based credit facility
On September 27, 2019, the Company entered into a senior secured asset-based credit facility consisting of (i) a revolving credit facility in an aggregate committed amount of $1.5 billion (as amended to the date hereto, the “ABL Revolving Facility”) and (ii) a first-in last-out term loan facility in an aggregate principal amount of $100.0 million (the “FILO Term Loan Facility” and, together with the ABL Revolving Facility, the “ABL Facility”) pursuant to that certain Credit Agreement.
On July 28, 2021, the Company entered into the Second Amendment to the Credit Agreement (the “Second Amendment”) to amend the ABL Facility. The Second Amendment extends the maturity of the ABL Facility from September 27, 2024 to July 28, 2026 and
allows the Company to increase the size of the ABL Facility by up to $600 million. The Company incurred additional debt issuance costs of $3.9 million ($3.6 million of which has been paid as of July 31, 2021) related to the modification of the ABL Facility during the second quarter of Fiscal 2022.
Revolving loans under the ABL Revolving Facility are available in an aggregate amount equal to the lesser of the aggregate ABL revolving commitments and a borrowing base determined based on the value of certain inventory and credit card receivables, subject to specified advance rates and reserves. Indebtedness under the ABL Facility is secured by substantially all of the assets of the Company and its subsidiaries, subject to customary exceptions. Borrowings under the ABL Revolving Facility bear interest at the Company’s option at either eurocurrency rate plus the applicable margin or a base rate plus the applicable margin, in each case depending on the excess availability under the ABL Revolving Facility. The Company had stand-by letters of credit outstanding of $18.8 million on the ABL Revolving Facility as of July 31, 2021. The Company had available borrowing capacity of $1.2 billion on the ABL Revolving Facility as of July 31, 2021.
As a result of the risks and uncertainties associated with the potential impacts of COVID-19 on the Company’s business, as a prudent measure to increase the Company’s financial flexibility and bolster its cash position, the Company borrowed an additional $900 million on the ABL Revolving Facility during the first quarter of Fiscal 2021. The Company made ABL Revolving Facility repayments during the third and fourth quarter of Fiscal 2021 and the outstanding amount borrowed under ABL Revolving Facility was fully paid down by the end of Fiscal 2021. During the fourth quarter of Fiscal 2021, the Company fully repaid the FILO Term Loan Facility.
If the excess availability under the ABL Revolving Facility falls below the threshold specified in the ABL Facility agreement, the Company will be required to maintain a fixed charge coverage ratio of not less than 1.00 to 1.00. As of July 31, 2021, the threshold related to the fixed coverage ratio was approximately $119 million. The ABL Facility places certain restrictions upon the Company’s ability to, among other things, incur additional indebtedness, pay dividends, grant liens and make certain loans, investments and divestitures. The ABL Facility contains customary events of default (including payment defaults, cross-defaults to certain of the Company’s other indebtedness, breach of representations and covenants and change of control). The occurrence of an event of default under the ABL Facility would permit the lenders to accelerate the indebtedness and terminate the ABL Facility.
Debt issuance costs relating to the ABL Revolving Facility totaled $12.6 million. The remaining unamortized debt issuance costs are recorded within other assets in the condensed consolidated balance sheets. Amortization relating to the debt issuance costs of $0.6 million and $1.1 million was recorded as interest expense in the condensed consolidated statements of operations for the 13 and 26 weeks ended July 31, 2021, respectively ($0.5 million and $0.9 million for the 13 and 26 weeks ended August 1, 2020, respectively). Unamortized debt issuance costs related to the ABL Revolving Facility totaled $9.2 million as of July 31, 2021 (January 30, 2021 and August 1, 2020: $6.4 million and $7.2 million, respectively).