Long-term Debt and Borrowing Facilities

9 Months Ended

Nov. 02, 2024

The following table provides the Company’s outstanding Long-term Debt balance, net of unamortized debt issuance costs and discounts and any current portion, as of November 2, 2024, February 3, 2024 and October 28, 2023:


	November 2, 2024		February 3, 2024		October 28, 2023
	(in millions)
Senior Secured Debt with Subsidiary Guarantee
$388 million Term Loan due August 2028 (“Term Loan Facility”)	$	383	$	385	$	385
Asset-based Revolving Credit Facility due August 2026 (“ABL Facility”)	440		145		555
Total Senior Secured Debt with Subsidiary Guarantee	823		530		940
Senior Debt with Subsidiary Guarantee
$600 million, 4.625% Fixed Interest Rate Notes due July 2029 (“2029 Notes”)	595		594		594
Total Senior Debt with Subsidiary Guarantee	595		594		594

Total	1,418		1,124		1,534
Current Debt	(4)		(4)		(4)
Total Long-term Debt, Net of Current Portion	$	1,414	$	1,120	$	1,530

Cash paid for interest was $49 million and $54 million for year-to-date 2024 and 2023, respectively.

Credit Facilities

The Company has a senior secured term loan B credit facility in an aggregate principal amount of $400 million, which will mature in August 2028. The Company is required to make quarterly principal payments on the Term Loan Facility in an amount equal to 0.25% of the original principal amount of $400 million. The Company made principal payments for the Term Loan Facility of $1 million during both the third quarter of 2024 and 2023 and $3 million during both year-to-date 2024 and 2023.

Interest on the loans under the Term Loan Facility is calculated by reference to the Term Secured Overnight Financing Rate (“Term SOFR”) or an alternative base rate, plus an interest rate margin (i) in the case of Term SOFR loans, ranging from 3.36% to 3.68% and (ii) in the case of alternate base rate loans, equal to 2.25%. The obligation to pay principal and interest on the loans under the Term Loan Facility is jointly and severally guaranteed on a full and unconditional basis by certain of the Company's wholly-owned domestic subsidiaries. The loans under the Term Loan Facility are secured on a first-priority lien basis by certain assets of the Company and its subsidiary guarantors that do not constitute priority collateral under the ABL Facility and on a second-priority lien basis by priority collateral under the ABL Facility, subject to customary exceptions. As of November 2, 2024, the interest rate on the loans under the Term Loan Facility was 8.46%.

The Company also has a senior secured asset-based revolving credit facility. The ABL Facility allows for borrowings and letters of credit in U.S. dollars or Canadian dollars and has aggregate commitments of $750 million and an expiration date of August 2026. The availability under the ABL Facility is equal to the lesser of (i) the borrowing base, determined primarily based on the Company's eligible U.S. and Canadian credit card receivables, eligible accounts receivable, eligible inventory and eligible real property, and (ii) the maximum aggregate commitment amount of $750 million. Interest on the loans under the ABL Facility is calculated by reference to (i) Term SOFR or an alternative base rate and (ii) in the case of loans denominated in Canadian dollars, the Canadian Dollar Offered Rate (“CDOR”) or a Canadian base rate, plus an interest rate margin based on average daily excess availability ranging from (x) in the case of CDOR loans, 1.50% to 2.00%, (y) in the case of alternate base rate loans and Canadian base rate loans, 0.50% to 1.00%, and (z) in the case of Term SOFR loans, 1.60% to 2.10%. Unused commitments under the ABL Facility accrue an unused commitment fee ranging from 0.25% to 0.30%. The obligation to pay principal and interest on the loans under the ABL Facility is jointly and severally guaranteed on a full and unconditional basis by certain of the Company's wholly-owned domestic and Canadian subsidiaries. The loans under the ABL Facility are secured on a first-priority lien basis by the Company's eligible U.S. and Canadian credit card receivables, eligible accounts receivable, eligible inventory and eligible real property and on a second-priority lien basis on substantially all other assets of the Company, subject to customary exceptions.

The Company borrowed $460 million and $405 million from the ABL Facility year-to-date 2024 and 2023, respectively, and made repayments of $165 million and $145 million under the ABL Facility year-to-date 2024 and 2023, respectively. As of November 2, 2024, there were borrowings of $440 million outstanding under the ABL Facility and the interest rate on the borrowings was 6.59%. The Company had $19 million of outstanding letters of credit as of November 2, 2024 that further reduced its availability under the ABL Facility. As of November 2, 2024, the Company's remaining availability under the ABL Facility was $291 million.

The Company's long-term debt and borrowing facilities contain certain financial and other covenants, including, but not limited to, the maintenance of financial ratios. The 2029 Notes and the Term Loan Facility include the maintenance of a consolidated coverage ratio and a consolidated total leverage ratio, and the ABL Facility includes the maintenance of a fixed charge coverage ratio and a debt to earnings before interest, income taxes, depreciation, amortization and rent (“EBITDAR”) ratio. The financial covenants could, within specific predefined circumstances, limit the Company's ability to incur additional indebtedness, make certain investments, pay dividends or repurchase shares. As of November 2, 2024, the Company was in compliance with all covenants under its long-term debt and borrowing facilities.