Debt

Debt as of November 2, 2013 and February 2, 2013 included the following components (in thousands):


	November 2, 2013		February 2, 2013

Senior secured revolving credit facility due 2017	$	33,000	$	—


Long-term debt:
9.25% Senior fixed rate notes due 2015	$	—	$	220,270
9.625%/10.375% Senior toggle notes due 2015		—		302,190
10.5% Senior subordinated notes due 2017		259,612		259,612
9.0% Senior secured first lien notes due 2019 (1)		1,139,721		1,141,294
8.875% Senior secured second lien notes due 2019		450,000		450,000
6.125% Senior secured first lien notes due 2020		210,000		—
7.75% Senior notes due 2020		320,000		—

Long-term debt	$	2,379,333	$	2,373,366


Obligation under capital lease (including current portion)	$	17,249	$	17,286

(1)	Amounts include unamortized premium of $14,721 and $16,294 as of November 2, 2013 and February 2, 2013, respectively.

6.125 % Senior Secured First Lien Notes

On March 15, 2013, the Company issued $210.0 million aggregate principal amount of 6.125% senior secured first lien notes that mature on March 15, 2020 (the “6.125% Senior Secured First Lien Notes”). The notes were issued at a price equal to 100.00% of the principal amount. Interest on the 6.125% Senior Secured First Lien Notes is payable semi-annually to holders of record at the close of business on March 1 and September 1 immediately preceding the interest payment date on March 15 and September 15 of each year, commencing on September 15, 2013. The 6.125% Senior Secured First Lien Notes are guaranteed on a first-priority senior secured basis by all of the Company’s existing and future direct or indirect wholly-owned domestic subsidiaries. These guarantees are full and unconditional as defined in Rule 3-10(h)(2) of Regulation S-X. The 6.125% Senior Secured First Lien Notes and related guarantees are secured, subject to certain exceptions and permitted liens, by a first-priority lien on substantially all of the assets of the Company’s material owned assets and the material owned assets of subsidiary guarantors, limited in the case of equity interests held by the Company or any subsidiary guarantor in a foreign subsidiary, to 100% of the non-voting equity interest and 65% of the voting equity interest of such foreign subsidiary held directly by the Company or a subsidiary guarantor. The liens rank equally with those securing the Company’s secured revolving credit facility (the “Credit Facility”) and the Company’s 9.0% senior secured first lien notes due 2019 (the “9.0% Senior Secured First Lien Notes”), and senior to those securing the Company’s 8.875% senior secured second lien notes due 2019 (the “Senior Secured Second Lien Notes”). The Company used the proceeds of the offering of the 6.125% Senior Secured First Lien Notes for note repurchases of $59.8 million pursuant to a tender offer to retire $39.0 million

aggregate principal amount of 9.25% Senior Fixed Rate Notes due 2015 (the “Senior Fixed Rate Notes”) and $21.5 million aggregate principal amount of 9.625%/10.375% Senior Toggle Notes due 2015 (the “Senior Toggle Notes”), to pay $1.9 million in tender premiums and fees, and to pay $4.0 million in financing costs which have been recorded as “Deferred financing costs, net” in the accompanying Unaudited Condensed Consolidated Balance Sheets. The Company used the remaining net proceeds, together with cash on hand, to redeem an additional $149.5 million aggregate principal amount of Senior Fixed Rate Notes on June 3, 2013 pursuant to the redemption provisions applicable to such notes.

7.75 % Senior Notes

On May 14, 2013, the Company issued $320.0 million aggregate principal amount of 7.75% senior notes that mature on June 1, 2020 (the “7.75% Senior Notes”). The 7.75% Senior Notes were issued at a price equal to 100.00% of the principal amount. Interest on the 7.75% Senior Notes is payable semi-annually to holders of record at the close of business on May 15 and November 15 immediately preceding the interest payment date on June 1 and December 1 of each year, commencing on December 1, 2013. The 7.75% Senior Notes are guaranteed by all of the Company’s existing and future direct or indirect wholly-owned domestic subsidiaries. These guarantees are full and unconditional as defined in Rule 3-10(h)(2) of Regulation S-X. The 7.75% Senior Notes and related guarantees are unsecured and will: (i) rank equal in right of payment with all of our existing and future indebtedness, (ii) rank senior to any of our existing and future indebtedness that is expressly subordinated to the 7.75% Senior Notes, and (iii) rank junior in priority to our obligations under all of our secured indebtedness, including the Credit Facility, the Senior Secured Second Lien Notes, the 9.0% Senior Secured First Lien Notes and the 6.125% Senior Secured First Lien Notes, to the extent of the value of assets securing such indebtedness. The Company used the net proceeds of the offering of the 7.75% Senior Notes to redeem all outstanding $31.8 million aggregate principal amount of Senior Fixed Rate Notes and all outstanding $280.7 million aggregate principal amount of Senior Toggle Notes on June 13, 2013 pursuant to the redemption provisions applicable to such notes.

Note Repurchases

The following is a summary of the Company’s debt repurchase activity for the nine months ended November 2, 2013 (in thousands). All debt repurchases in the nine months ended November 2, 2013, were pursuant to the tender offer and note redemptions described above. There was no debt repurchase activity for the three months ended November 2, 2013 and for the three and nine months ended October 27, 2012.


	Nine Months Ended November 2, 2013
Notes Repurchased	Principal Amount		Repurchase Price		Recognized Loss (1)
Senior Fixed Rate Notes	$	220,270	$	219,802	$	2,597
Senior Toggle Notes		302,190		301,947		2,198

	$	522,460	$	521,749	$	4,795

(1)	Net of deferred issuance cost write-offs of $1,829 for the Senior Fixed Rate Notes and $1,766 for the Senior Toggle Notes and tender premiums and fees of $1,236 for the Senior Fixed Rate Notes and $675 for the Senior Toggle Notes.

During the three and nine months ended October 27, 2012, the Company recognized a $5.1 million and $9.7 million loss, respectively, on early debt extinguishment attributed to the write-off of unamortized debt issuance costs associated with the early repayment of indebtedness under our senior secured term loan facility and replacement of our former $200.0 million senior secured revolving credit facility.

Note Covenants

Our 10.5% Senior Subordinated Notes due 2017 (the “Senior Subordinated Notes”), Senior Secured Second Lien Notes, 9.0% Senior Secured First Lien Notes, 6.125% Senior Secured First Lien Notes and 7.75% Senior Notes (collectively, the “Notes”) and our Credit Facility contain certain covenants that, among other things, are subject to certain exceptions and other basket amounts, restrict our ability and the ability of our subsidiaries to:

•

incur additional indebtedness;

•

pay dividends or distributions on our capital stock, repurchase or retire our capital stock and redeem, repurchase or defease any subordinated indebtedness;

•

make certain investments;

•

create or incur certain liens;

•

create restrictions on the payment of dividends or other distributions to us from our subsidiaries;

•

transfer or sell assets;

•

engage in certain transactions with our affiliates; and

•

merge or consolidate with other companies or transfer all or substantially all of our assets.

The Credit Facility also contains customary provisions relating to mandatory prepayments, voluntary payments, affirmative and negative covenants, and events of default; however, it does not contain any covenants that require the Company to maintain any particular financial ratio or other measure of financial performance except that so long as the revolving loans and letters of credit outstanding exceed $15.0 million, the Company will be required to comply, at each borrowing date measured at the end of the prior fiscal quarter, and at the end of each quarter, with a maximum Total Net Secured Leverage Ratio of 5.5 to 1.0 based upon the ratio of its net senior secured first lien debt to adjusted earnings before interest, taxes, depreciation and amortization for the period of four consecutive fiscal quarters most recently ended.

Certain of these covenants in the indentures governing the Notes, such as limitations on the Company’s ability to make certain payments such as dividends, or incur debt, will no longer apply if the Notes have investment grade ratings from both of the rating agencies of Moody’s Investor Services, Inc. (“Moody’s”) and Standard & Poor’s Ratings Group (“S&P”) and no event of default has occurred. Since the date of issuance of the Notes, the Notes have not received investment grade ratings from Moody’s or S&P. Accordingly, all of the covenants under the Notes currently apply to the Company. None of these covenants, however, require the Company to maintain any particular financial ratio or other measure of financial performance except as previously disclosed herein for the Credit Facility.

See Note 3 – Fair Value Measurements for related fair value disclosure on debt.