Loans, overdrafts and long-term debt



(in millions)	February 3, 2018			January 28, 2017
Debt:
Senior unsecured notes due 2024, net of unamortized discount	$	398.9		$	398.8
Securitization facility	—			600.0
Senior unsecured term loan	326.2			348.6
Revolving credit facility	—			56.0
Bank overdrafts	14.2			14.2
Total debt	$	739.3		$	1,417.6
Less: Current portion of loans and overdrafts	(44.0		)	(91.1		)
Less: Unamortized capitalized debt issuance fees	(7.1		)	(8.6		)
Total long-term debt	$	688.2		$	1,317.9

Revolving credit facility and term loan (the “Credit Facility”)

During the second quarter of Fiscal 2017, Signet amended and restated its Credit Facility agreement to (i) increase the borrowing capacity under the revolving credit facility from $400 million to $700 million and extend the maturity date to July 2021 and (ii) extend the maturity date of the term loan facility to July 2021 and revise the scheduled quarterly principal repayments to align with the July 2021 maturity date. The amendment of the Credit Facility was accounted for as a modification of existing debt in accordance with ASC Topic 470-50, “Debt Modifications and Extinguishments.”

In connection with the amendment of the revolving credit facility, incremental fees of $1.4 million were incurred and capitalized. Capitalized fees associated with the amended revolving credit facility as of February 3, 2018 total $2.6 million with the unamortized balance recorded as an asset within the consolidated balance sheets. Accumulated amortization related to these capitalized fees as of February 3, 2018 was $1.2 million (January 28, 2017: $0.8 million). Amortization relating to these fees of $0.4 million and $0.4 million was recorded as interest expense in the consolidated income statements for Fiscal 2018 and Fiscal 2017, respectively. As of February 3, 2018 and January 28, 2017, the Company had stand-by letters of credit outstanding of $15.7 million and $15.3 million, respectively, that reduce remaining borrowing availability. The revolving credit facility had a weighted average interest rate of 2.46% and 1.71% during Fiscal 2018 and Fiscal 2017, respectively.

The senior unsecured term loan had an outstanding principal balance of $357.5 million as of the amendment date. Beginning in October 2016, the Company is required to make scheduled quarterly principal payments equal to the amounts per annum of the outstanding principal balance 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 in July 2021. Excluding the impact of the interest rate swap designated as a cash flow hedge discussed in Note 18, the term loan had a weighted average interest rate of 2.42% and 1.78% during Fiscal 2018 and Fiscal 2017, respectively.

In connection with the amendment of the term loan facility, incremental fees of $0.7 million were incurred and capitalized. Capitalized fees associated with the amended term loan facility as of February 3, 2018 total $6.2 million with the unamortized balance recorded as a direct deduction from the outstanding liability within the consolidated balance sheets. Accumulated amortization related to these capitalized fees as of February 3, 2018 was $3.5 million (January 28, 2017: $2.7 million). Amortization relating to these fees of $0.8 million and $0.9 million was recorded as interest expense in the consolidated income statements Fiscal 2018 and Fiscal 2017, respectively.

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. 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.

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 “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 27 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 February 3, 2018 was $2.6 million (January 28, 2017: $1.9 million). The remaining unamortized capitalized fees are recorded as a direct deduction from the outstanding liability within the consolidated balance sheets. Amortization relating to these fees of $0.7 million and $0.7 million was recorded as interest expense in the consolidated income statements for Fiscal 2018 and Fiscal 2017, respectively.

Asset-backed securitization facility

The Company sold an undivided interest in certain credit card receivables to Sterling Jewelers Receivables Master Note Trust (the “Issuer”) and issued two-year revolving asset-backed variable funding notes. As a condition of closing the credit transaction disclosed in Note 3, during the third quarter of Fiscal 2018, the Company terminated the asset-backed securitization facility, which had a principal balance outstanding of $600 million, in order to transfer the receivables free and clear. Unamortized capitalized fees of $0.2 million associated with the asset-backed securitization facility were written-off during the third quarter of Fiscal 2018. Capitalized fees previously totaled $3.4 million, offset by accumulated amortization of $3.4 million as of February 3, 2018 (January 28, 2017: $3.1 million). Amortization relating to these fees of $0.3 million and $0.7 million was recorded as interest expense in the consolidated income statements for Fiscal 2018 and Fiscal 2017, respectively. The asset-backed securitization facility had a weighted average interest rate of 2.50% and 2.05% during Fiscal 2018 and Fiscal 2017, respectively.

Unsecured term loan (the “Bridge Loan”)

In conjunction with the acquisition of R2Net, Signet entered into a $350 million unsecured term loan to finance the transaction. The Company executed and repaid the Bridge Loan during the 13 weeks ended October 28, 2017. The Bridge Loan contained customary fees in addition to interest incurred on borrowings. Fees incurred of $1.4 million and interest of $0.9 million relating to the Bridge Loan were expensed during Fiscal 2018.

Other

As of February 3, 2018 and January 28, 2017, the Company was in compliance with all debt covenants.

As of February 3, 2018 and January 28, 2017, there were $14.2 million and $14.2 million in overdrafts, which represent issued and outstanding checks where no bank balances exist with the right of offset.