NOTE 6 — DEBT

Long-term debt consisted of the following outstanding principal amounts presented with respective interest rates as of October 30, 2011 and January 30, 2011 (dollars in millions):


	October 30, 2011					January 30, 2011
	Outstanding Principal			Interest Rate %		Outstanding Principal			Interest Rate %
Term Loan due August 30, 2012	$	73			1.62	$	74			1.56
Term Loan due April 1, 2014		857			3.12		864			3.06
Revolving Credit Facility due August 30, 2013		—			—		—			—
ABL Revolving Credit Facility due August 30, 2012		16			1.75		—			—
ABL Revolving Credit Facility due April 1, 2014		103			3.50		—			—
ABL Term Loan due April 1, 2014		214			3.51		214			3.53
12.0% Senior Notes due September 1, 2014		2,500			12.00		2,500			12.00
13.5% Senior Subordinated Notes due September 1, 2015		1,820			13.50		1,597			13.50

Total long-term debt		5,583					5,249
Less current installments		(99	)				(10	)

Long-term debt, excluding current installments	$	5,484				$	5,239

Senior Secured Credit Facility

The Company maintains a senior secured credit facility (the “Senior Secured Credit Facility”) comprised of a $930 million term loan (the “Term Loan”) and a $200 million revolving credit facility (the “Revolving Credit Facility”). As of October 30, 2011 and January 30, 2011, there were no outstanding Letters of Credit under the Revolving Credit Facility.

Asset Based Lending Credit Agreement

The Company maintains a $2.1 billion asset based lending credit agreement (the “ABL Credit Facility”) subject to borrowing base limitations. As of October 30, 2011, the Company had additional availability under the ABL Credit Facility of $912 million, after giving effect to the borrowing base limitations and letters of credit issued and including $20 million of borrowings available on qualifying cash balances. As of October 30, 2011, there were approximately $10 million and $61 million, respectively, of Letters of Credit outstanding under the ABL Credit Facility due August 30, 2012 and April 1, 2014, respectively. As of January 30, 2011, there were approximately $11 million and $60 million, respectively, of Letters of Credit outstanding under the ABL Credit Facility due August 30, 2012 and April 1, 2014, respectively.

Lehman Brothers and Woodlands Commercial Bank

Lehman Brothers Special Financing Inc. and Lehman Commercial Paper, Inc. (together “Lehman Brothers”) is committed to fund up to $95 million of the non-extended portion of the Company’s $2.1 billion ABL Credit Facility, maturing August 30, 2012, and Woodlands Commercial Bank (“Woodlands,” f/k/a Lehman Commercial Bank, an affiliate of Lehman Brothers) is committed to fund $100 million of the Company’s $300 million original availability under the Revolving Credit Facility.

On September 15, 2008, Lehman Brothers filed a petition under Chapter 11 of the U.S. Bankruptcy Code with the United States Bankruptcy Court for the Southern District of New York (“Lehman’s bankruptcy”). Subsequent to Lehman’s bankruptcy, the Company drew down on the ABL Credit Facility and Lehman Brothers failed to fund their portion of the ABL Credit Facility commitment. As a result of Lehman Brothers’ default, the Company no longer pays the 0.25% unused commitment fee on Lehman Brothers’ $95 million ABL Credit Facility commitment. As of October 30, 2011, outstanding borrowings under the ABL Credit Facility from Lehman Brothers were $4 million. The Administrative Agent of the ABL Credit Facility holds approximately $24 million in escrow funds, which are available to honor Lehman Brothers’ pro rata portion of any ABL Credit Facility draw. The combined available unfunded commitment from Lehman Brothers as of October 30, 2011 (without taking into consideration the ABL Credit Facility borrowing base limitations) was approximately $67 million.

On April 21, 2011, the Company drew down the entire $300 million Revolving Credit Facility and Woodlands failed to fund their $100 million Revolving Credit Facility commitment. The following day, the Company repaid the entire Revolving Credit Facility balance. As a result of Woodlands’ default, the Company no longer pays the 0.5% unused commitment fee on Woodlands’ $100 million Revolving Credit Facility commitment and the Revolving Credit Facility is effectively reduced to $200 million.

12.0% Senior Notes and 13.5% Senior Subordinated Notes

On August 30, 2007, the Company issued $2.5 billion of Senior Notes bearing interest at a rate of 12.0% (the “12.0% Senior Notes”). Interest payments are due each March and September 1st through maturity.

On August 30, 2007, the Company issued $1.3 billion of Senior Subordinated PIK Notes bearing interest at a rate of 13.5% (the “13.5% Senior Subordinated Notes”). Interest payments are due each March and September 1st through maturity except that the first eight payment periods through September 2011 were payments in kind (“PIK”) and therefore increased the balance of the outstanding indebtedness rather than paid in cash. As of October 30, 2011, the outstanding principal balance of the 13.5% Senior Subordinated Notes was $1.8 billion.

Debt covenants

The Company’s outstanding debt agreements contain various restrictive covenants including, but not limited to, limitations on additional indebtedness and dividend payments and stipulations regarding the use of proceeds from asset dispositions. The Company is in compliance with all such covenants.