Debt Obligations

3 Months Ended

May 02, 2015

Debt Disclosure [Abstract]

Debt Obligations and Warrant Liabilities

DEBT OBLIGATIONS

$50 Million Secured Credit Facility- On August 2, 2013, the Company entered into a $50 million secured revolving credit agreement (the "Credit Facility"), which has a term of five years and will expire on July 31, 2018. The Credit Facility may be increased by up to $100 million upon the Company's request and the increase would be subject to lender availability, DSW Inc.'s financial condition and compliance with covenants. The Credit Facility is secured by a lien on substantially all of DSW Inc.'s personal property assets and its subsidiaries with certain exclusions and may be used to provide funds for general corporate purposes, to provide for ongoing working capital requirements and to make permitted acquisitions. The Credit Facility contains restrictive covenants relating to management and the operation of DSW Inc.'s business. These covenants, among other things, limit or restrict DSW Inc.'s ability to grant liens on its assets, limit its ability to incur additional indebtedness, limit its ability to enter into transactions with affiliates and limit its ability to merge or consolidate with another entity. The Credit Facility also requires that DSW Inc. meet the minimum cash and short-term investments requirement of $125 million, as defined in the Credit Facility. An additional covenant limits payments for capital expenditures to $200 million in any fiscal year. The Company paid $26.7 million for capital expenditures for the three months ended May 2, 2015.

As of May 2, 2015, January 31, 2015 and May 3, 2014, the Company had no outstanding borrowings under the Credit Facility and had availability under the facility of $50.0 million, $50.0 million and $49.5 million. The Company had no outstanding letters of credit under the Credit Facility as of May 2, 2015 and January 31, 2015, and had $0.5 million outstanding letters of credit under the Credit Facility as of May 3, 2014.

$50 Million Letter of Credit Agreement- Also on August 2, 2013, the Company entered into a letter of credit agreement (the “Letter of Credit Agreement”). The Letter of Credit Agreement provides for the issuance of letters of credit up to $50 million, with a term of five years that will expire on August 2, 2018. The facility for the issuance of letters of credit is secured by a cash collateral account containing cash in an amount equal to 103% of the face amount of any letter of credit extension (105% for extensions denominated in foreign currency) and is used for general corporate purposes.

As of May 2, 2015, January 31, 2015 and May 3, 2014, the Company had $4.4 million, $9.3 million and $4.5 million, respectively, in outstanding letters of credit under the Letter of Credit Agreement, and $6.6 million, $11.5 million and $6.4 million, respectively, in restricted cash on deposit as collateral under the Letter of Credit Agreement. The restricted cash balance is recorded in prepaid expenses and other current assets on the condensed consolidated balance sheets.