Loans, overdrafts and long-term debt



(in millions)	October 31, 2015		January 31, 2015		November 1, 2014
Current liabilities – loans and overdrafts:
Revolving credit facility	$	147.0	$	—	$	145.0
Current portion of senior unsecured term loan	32.5		25.0		22.5
Current portion of capital lease obligations	0.2		0.9		1.1
Bank overdrafts	70.1		71.6		53.2
Total loans and overdrafts	249.8		97.5		221.8

Long-term debt:
Senior unsecured notes due 2024, net of unamortized discount	398.6		398.5		398.4
Securitization facility	600.0		600.0		600.0
Senior unsecured term loan	340.0		365.0		372.5
Capital lease obligations	0.1		0.3		0.4
Total long-term debt	$	1,338.7	$	1,363.8	$	1,371.3

Total loans, overdrafts and long-term debt	$	1,588.5	$	1,461.3	$	1,593.1

Revolving credit facility and term loan (the "Credit Facility")

The Company has a $400 million senior unsecured multi-currency multi-year revolving credit facility agreement that was entered into in May 2011. The agreement was subsequently amended in May 2014 to extend the maturity date to 2019 and expand the agreement to include a new $400 million term loan. The $400 million five-year senior unsecured term loan requires the Company to make scheduled quarterly principal payments commencing on November 1, 2014 equal to the amounts per annum of the original principal amount of the term loan as follows: 5% in the first year, 7.5% in the second year, 10% in the third year, 12.5% in the fourth year and 15% in the fifth year after the initial payment date, with the balance due on May 27, 2019. As of October 31, 2015, $372.5 million remained outstanding on the term loan. Excluding impact of interest rate swaps designated as cash flow hedges discussed in Note 14, the term loan had a weighted average interest rate of 1.46% through the third quarter of Fiscal 2016.

Borrowings under the Credit Facility bear interest at a rate per annum equal to an applicable margin, plus, at the Company’s option, either (a) a base rate or (b) a LIBOR rate. The Credit Facility provides that the Company may voluntarily repay outstanding loans at any time without premium or penalty other than reimbursement of the lender’s redeployment and breakage costs in certain cases. In addition, the Credit Facility contains various customary representations and warranties, financial reporting requirements and other affirmative and negative covenants. As with the Company’s prior credit facility, the Company is required to maintain at all times a leverage ratio of no greater than 2.50 to 1.00 and a fixed charge coverage ratio of no less than 1.40 to 1.00, both determined as of the end of each fiscal quarter for the trailing twelve months.

Capitalized fees relating to the amended Credit Facility total $6.7 million. Accumulated amortization related to these capitalized fees as of October 31, 2015 was $1.9 million (January 31, 2015 and November 1, 2014: $0.9 million and $0.6 million, respectively). Amortization relating to these fees of $0.4 million and $1.0 million was recorded as interest expense in the condensed consolidated statements of operations for the 13 and 39 weeks ended October 31, 2015, respectively ($0.3 million and $0.6 million for the 13 and 39 weeks ended November 1, 2014, respectively). In addition, capitalized fees associated with the May 2011 credit facility agreement of $0.9 million were written-off in the 39 weeks ended November 1, 2014 upon execution of the amended credit agreement in May 2014.

At October 31, 2015 and November 1, 2014 there were $147.0 million and $145.0 million outstanding under the revolving credit facility, respectively. There were no outstanding borrowings under the revolving credit facility as of January 31, 2015. The Company had stand-by letters of credit on the revolving credit facility of $21.3 million, $25.4 million and $21.6 million as of October 31, 2015, January 31, 2015 and November 1, 2014, respectively, that reduce remaining availability under the revolving credit facility. The revolving credit facility had a weighted average interest rate of 1.18% through the third quarter of Fiscal 2016.

On February 19, 2014, Signet entered into a definitive agreement to acquire Zale Corporation and concurrently received commitments for an $800 million 364-day unsecured bridge facility to finance the transaction. The bridge facility contained customary fees and incurred interest on any borrowings drawn on the facility. In May 2014, Signet executed its Zale Acquisition financing as described in Note 3, replacing the bridge facility commitments in addition to amending its Credit Facility as outlined above, issuing senior unsecured notes and securitizing credit card receivables. No amounts were drawn on the bridge facility commitments prior to replacement by the issuances of long-term debt listed below. Fees of $4.0 million relating to this unsecured bridge facility were incurred and capitalized during Fiscal 2015. The capitalized fees of $4.0 million were fully expensed during the 39 weeks ended November 1, 2014.

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 4.700% senior unsecured notes due in 2024 (the “Notes”). The Notes were issued under an effective registration statement previously filed with the SEC. Interest on the notes is payable semi-annually on June 15 and December 15 of each year, commencing December 15, 2014. The 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”). See Note 22 for additional information. The Notes were issued pursuant to a base indenture among the Company, Signet UK Finance, the Guarantors and Deutsche Bank Trust Company Americas as trustee, with the indenture containing customary covenants and events of default provisions. The Company received proceeds from the offering of approximately $393.9 million, which were net of underwriting discounts, commissions and offering expenses.

Capitalized fees relating to the senior unsecured notes total $7.0 million. Accumulated amortization related to these capitalized fees as of October 31, 2015 was $1.0 million (January 31, 2015 and November 1, 2014: $0.5 million and $0.3 million, respectively). Amortization relating to these fees of $0.2 million and $0.5 million was recorded as interest expense in the condensed consolidated statements of operations for the 13 and 39 weeks ended October 31, 2015, respectively ($0.2 million and $0.3 million for the 13 and 39 weeks ended November 1, 2014, respectively).

Asset-backed securitization facility

On May 15, 2014, the Company sold an undivided interest in certain credit card receivables to Sterling Jewelers Receivables Master Note Trust (the “Issuer”), a wholly-owned Delaware statutory trust and a wholly-owned indirect subsidiary of the Company and issued two-year revolving asset-backed variable funding notes to unrelated third party conduits pursuant to a master indenture dated as of November 2, 2001, as supplemented by the Series 2014-A indenture supplement dated as of May 15, 2014 among the Issuer, Sterling Jewelers Inc. ("SJI") and Deutsche Bank Trust Company Americas, the indenture trustee. Under terms of the notes, the Issuer has obtained $600 million of financing from the unrelated third party commercial paper conduits sponsored by JPMorgan Chase Bank, N.A., which indebtedness is secured by credit card receivables originated from time to time by SJI. The credit card receivables will ultimately be transferred to the Issuer and are serviced by SJI. Signet guarantees the performance by SJI of its obligations under the agreements associated with this financing arrangement. Borrowings under the asset-backed variable funding notes bear interest at a rate per annum equal to LIBOR plus an applicable margin. Payments received from customers for balances outstanding on securitized credit card receivables are utilized to repay amounts outstanding under the facility each period, while proceeds from the facility are received for incremental credit card receivables originated when the receivables are pledged to the Issuer. Such payments received from customers and proceeds from the facility are reflected on a gross basis in the condensed consolidated statements of cash flows. As of October 31, 2015, $600.0 million remained outstanding under the securitization facility with a weighted average interest rate of 1.56% through the third quarter of Fiscal 2016.

Capitalized fees relating to the asset-backed securitization facility total $2.8 million. Accumulated amortization related to these capitalized fees as of October 31, 2015 was $1.9 million (January 31, 2015 and November 1, 2014: $0.9 million and $0.6 million, respectively). Amortization relating to these fees of $0.3 million and $1.0 million was recorded as interest expense in the condensed consolidated statements of operations for the 13 and 39 weeks ended October 31, 2015, respectively ($0.4 million and $0.6 million for the 13 and 39 weeks ended November 1, 2014, respectively).

During the second quarter of Fiscal 2016, Signet amended the note purchase agreement associated with the asset-backed securitization facility to extend the term of the facility by one year to May 2017 with all terms substantially the same as the original agreement.

Other

As of October 31, 2015, January 31, 2015 and November 1, 2014, the Company was in compliance with all debt covenants.

As of October 31, 2015, January 31, 2015 and November 1, 2014, there were $70.1 million, $71.6 million and $53.2 million in overdrafts, respectively, which represent issued and outstanding checks where no bank balances exist with the right of offset.