5. DEBT

Debt as of January 31, 2015 and February 1, 2014 included the following components (in thousands):


	January 31, 2015		February 1, 2014
Long-term debt:
10.5% Senior subordinated notes due 2017	$	259,612	$	259,612
9.0% Senior secured first lien notes due 2019 ⁽¹⁾		1,136,866		1,139,174
8.875% Senior secured second lien notes due 2019		450,000		450,000
6.125% Senior secured first lien notes due 2020		210,000		210,000
7.75% Senior notes due 2020		320,000		320,000

Total long-term debt	$	2,376,478	$	2,378,786

Obligation under capital lease (including current portion)	$	17,124	$	17,232

(1)	Amount includes unamortized premium of $11,866 and $14,174 as of January 31, 2015 and February 1, 2014, respectively.

As of January 31, 2015, the Company’s total debt maturities are as follows for each of the following fiscal years (in thousands):


	Capital Leases			Debt
2015	$	2,357		$	—
2016		2,404			—
2017		2,453			259,612
2018		2,502			—
2019		2,552			1,575,000
Thereafter		27,721			530,000

Total		39,989		$	2,364,612

Imputed interest		(22,865	)

Present value of minimum capital lease principal payments		17,124
Current portion		170

Long-term capital lease obligation	$	16,954

The Company’s interest expense, net for Fiscal 2014, Fiscal 2013 and Fiscal 2012 included the following components (in thousands):


	Fiscal 2014			Fiscal 2013			Fiscal 2012
Term loan facility	$	—		$	—		$	17,644
U.S. senior secured revolving credit facility due 2017		3,368			1,745			935
Europe unsecured revolving credit facility due 2017		308			—			—
9.25% Senior fixed rate notes due 2015		—			6,021			20,663
9.625%/10.375% Senior toggle notes due 2015		—			9,895			29,493
10.5% Senior subordinated notes due 2017		27,193			27,191			27,642
9.0% Senior secured first lien notes due 2019		100,985			100,999			62,504
8.875% Senior secured second lien notes due 2019		39,838			39,838			40,716
6.125% Senior secured first lien notes due 2020		12,844			11,379			—
7.75% Senior notes due 2020		24,734			17,875			—
Capital lease obligation		2,203			2,205			2,203
Amortization of deferred debt issue costs		8,026			8,166			9,927
Accretion of debt premium		(2,308	)		(2,120	)		(831	)
Other interest expense		24			232			99
Interest income		(36	)		(65	)		(198	)

Interest expense, net	$	217,179		$	223,361		$	210,797

Accrued interest payable as of January 31, 2015 and February 1, 2014 consisted of the following components (in thousands):


	January 31, 2015		February 1, 2014
U.S. senior secured revolving credit facility due 2017	$	71	$	78
Europe unsecured revolving credit facility due 2017		25		—
10.5% Senior subordinated notes due 2017		4,643		4,718
9.0% Senior secured first lien notes due 2019		38,664		38,942
8.875% Senior secured second lien notes due 2019		15,251		15,361
6.125% Senior secured first lien notes due 2020		4,912		4,947
7.75% Senior notes due 2020		4,224		4,292

Total accrued interest payable	$	67,790	$	68,338

LONG-TERM DEBT

U.S. Revolving Credit Facility

The Former Credit Facility was with a syndication of lenders and consisted of a $1.45 billion senior secured Former Term Loan and a $200.0 million senior secured Former Revolver. At the consummation of the Merger, the Company drew the full amount of the Former Term Loan and was issued a $4.5 million letter of credit. The letter of credit was subsequently increased to $6.0 million and later reduced to $4.8 million. During Fiscal 2012, we issued $1,142.1 million of the 9.0% Senior Secured First Lien Notes that mature on March 15, 2019 (the “9.0% Senior Secured First Lien Notes”). We used the net proceeds together with cash on hand, to repay $1,154.3 million of indebtedness under the Former Term Loan.

On September 20, 2012, the Company terminated the Former Credit Facility and entered into an Amended and Restated Credit Agreement by and among Claire’s Inc. (“Parent”), the Company, Credit Suisse AG, as Administrative Agent, and the other Lenders named therein (the “U.S. Credit Facility”), pursuant to which the Company replaced the $200.0 million senior secured Former Revolver maturing May 29, 2013 with a $115.0 million five-year senior secured revolving credit facility maturing in Fiscal 2017.

Borrowings under the U.S. Credit Facility will bear interest at a rate equal to, at the Company’s option, either (a) an alternate base rate determined by reference to the higher of (1) the prime rate in effect on such day, (2) the federal funds effective rate plus 0.50% and (3) the one-month LIBOR rate plus 1.00%, or (b) a LIBOR rate with respect to any Eurodollar borrowing, determined by reference to the costs of funds for U.S. dollar deposits in the London Interbank Market for the interest period relevant to such borrowing, adjusted for certain additional costs, in each case plus an applicable margin of 4.50% for LIBOR rate loans and 3.50% for alternate base rate loans. The Company will also pay a facility fee of 0.50% per annum of the committed amount of the U.S. Credit Facility whether or not utilized.

All obligations under the U.S. Credit Facility are unconditionally guaranteed by (i) Parent, prior to an initial public offering of the Company’s stock, and (ii) the Company’s existing and future direct or indirect wholly-owned domestic subsidiaries, subject to certain exceptions.

All obligations under the U.S. Credit Facility, and the guarantees of those obligations, are secured, subject to certain exceptions and permitted liens, by a first priority lien on, (i) all of the Company’s capital stock, prior to an initial public offering of its stock, and (ii) substantially all 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 interests and 65% of the voting equity interests of such foreign subsidiary held directly by the Company or a subsidiary guarantor. The liens securing the Credit Facility rank equally to the liens securing the 9.0% Senior Secured First Lien Notes (described below) and the 6.125% Senior Secured First Lien Notes (described below), and senior to those securing the Senior Secured Second Lien Notes (described below).

The U.S. Credit Facility 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, when the revolving loans and letters of credit outstanding exceed $15.0 million, the Company will be required to comply 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. In addition, under the U.S. Credit Facility, the Company must comply with this maximum Total Net Secured Leverage Ratio requirement, measured as of the most recent four consecutive quarter period for which financial statements have been (or were required to be) delivered to our lenders, at any time we request a borrowing that would result in such outstanding amount exceeding $15.0 million.

On April 30, 2014, the Company entered into Amendment No. 1 to its Amended and Restated Credit Agreement with respect to the Company’s senior secured revolving credit facility due 2017 (as amended, the “U.S. Credit Facility”), dated as of September 20, 2012, among the Company, Claire’s, Inc., the Administrative Agent and Issuing Agent named therein and the Lenders party thereto (the “Amendment”). The Amendment increased the maximum permitted Total Net Secured Leverage Ratio from 5.50:1.00 to 6.00:1.00 for purposes of the covenant described below under “U.S Revolving Credit Facility and Note Covenants.”

As of January 31, 2015 and February 1, 2014, there were no borrowings outstanding under the U.S. Credit Facility. The Company must also pay customary letter of credit fees and agency fees. As of January 31, 2015, the Company had $3.0 million of letters of credit outstanding.

10.50% Senior Subordinated Notes

In connection with the Transactions, the Company issued $335.0 million of 10.50% Senior Subordinated Notes due 2017 (the “Senior Subordinated Notes”). The Senior Subordinated Notes are senior subordinated obligations of the Company and will mature on June 1, 2017. Interest is payable semi-annually at 10.50% per annum, which commenced on December 1, 2007.

Each of the Company’s wholly-owned domestic subsidiaries that guarantee indebtedness under the U.S. Credit Facility jointly and severally irrevocably and unconditionally guarantee on a senior subordinated basis the performance and punctual payment when due, whether at stated maturity, by acceleration or otherwise, of all obligations of the Company under the Senior Subordinated Notes, expenses, indemnification or otherwise. These guarantees are full and unconditional as defined in Rule 3-10(h)(2) of Regulation S-X.

The Company may redeem the Senior Subordinated Notes at its option, subject to certain notice provisions, at the following redemption prices (expressed as a percentage of principal amount), plus accrued and unpaid interest to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the twelve-month period commencing on June 1 of the years set forth below:


Period	Redemption Price
2012		105.25	%
2013		103.50	%
2014		101.75	%
2015 and thereafter		100.00	%

Upon the occurrence of a change of control, each holder of the Senior Subordinated Notes has the right to require the Company to repurchase all or any part of such holder’s Senior Subordinated Notes, at a price in cash equal to 101% of the principal amount of the Senior Subordinated Notes redeemed plus accrued and unpaid interest, if any.

8.875% Senior Secured Second Lien Notes

On March 4, 2011, the Company issued $450.0 million aggregate principal amount of 8.875% senior secured second lien notes that mature on March 15, 2019 (the “Senior Secured Second Lien Notes”). Interest on the Senior Secured Second Lien Notes is payable semi-annually to holders of record at the close of business on March 1 or September 1 immediately preceding the interest payment date on March 15 and September 15 of each year, commencing on September 15, 2011.

The Senior Secured Second Lien Notes are guaranteed on a second-priority senior secured basis by all of the Company’s existing and future direct or indirect wholly-owned domestic subsidiaries that guarantee the U.S. Credit Facility. The Senior Secured Second Lien Notes and related guarantees are secured by a second-priority lien on substantially all of the assets that secure the Company’s and its subsidiary guarantors’ obligations under the U.S. Credit Facility. These guarantees are full and unconditional as defined in Rule 3-10(h)(2) of Regulation S-X. On or after March 15, 2015, the Company may redeem the Senior Secured Second Lien Notes at its option, subject to certain notice provisions, at the following redemption prices (expressed as a percentage of principal amount), plus accrued and unpaid interest to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the twelve-month period commencing on March 15 of the years set forth below:


Period	Redemption Price
2015		104.438	%
2016		102.219	%
2017 and thereafter		100.000	%

The Company may also redeem the Senior Secured Second Lien Notes prior to March 15, 2015, subject to certain notice periods, at a price equal to 100% of the principal amount of the Senior Secured Second Lien Notes redeemed plus an applicable premium and accrued and unpaid interest, if any.

The Company used the net proceeds of the offering of the Senior Secured Second Lien Notes to reduce the entire $194.0 million outstanding under the Former Revolver (without terminating the commitment) and to repay $241.0 million indebtedness under the Former Term Loan.

9.0% Senior Secured First Lien Notes

On February 28, 2012, the Company issued $400.0 million aggregate principal amount of the 9.0% Senior Secured First Lien Notes. The notes were issued at a price equal to 100.00% of the principal amount. On March 12, 2012, the Company issued an additional $100.0 million aggregate principal amount of the same series of 9.0% Senior Secured First Lien Notes at a price equal to 101.50% of the principal amount. On September 20, 2012, the Company issued an additional $625.0 million aggregate principal amount of the same series of 9.0% Senior Secured First Lien Notes at a price equal to 102.50% of the principal amount.

Interest on the 9.0% Senior Secured First Lien Notes is payable semi-annually to holders of record at the close of business on March 1 or September 1 immediately preceding the interest payment date on March 15 and September 15 of each year, commencing on September 15, 2012. The 9.0% 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 9.0% 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 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 interests and 65% of the voting equity interests of such foreign subsidiary held directly by the Company or a subsidiary guarantor. The liens securing the 9.0% Senior Secured First Lien Notes rank equally to the liens securing the U.S. Credit Facility and the 6.125% Senior Secured First Lien Notes (described below), and senior to those securing the Senior Secured Second Lien Notes. The 9.0% Senior Secured First Lien Notes are subject to customary covenants, (described below), and events of default.

On or after March 15, 2015, the Company may redeem the 9.0% Senior Secured First Lien Notes at its option, subject to certain notice provisions, at the following redemption prices (expressed as a percentage of principal amount), plus accrued and unpaid interest to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the twelve-month period commencing on March 15 of the years set forth below:


Period	Redemption Price
2015		106.750	%
2016		104.500	%
2017		102.250	%
2018 and thereafter		100.000	%

In addition, prior to March 15, 2015, the Company may redeem in the aggregate up to 35% of the original aggregate principal amount of the 9.0% Senior Secured First Lien Notes with the net cash proceeds of certain equity offerings at a redemption price of 109.000%, plus accrued unpaid interest. The Company may also redeem 9.0% Senior Secured First Lien Notes prior to March 15, 2015, subject to certain notice periods, at a price equal to 100% of the principal amount of the 9.0% Senior Secured First Lien Notes redeemed plus an applicable premium and accrued and unpaid interest, if any.

The Company used the proceeds of the offerings of the 9.0% Senior Secured First Lien Notes to reduce $1,154.3 million of indebtedness under the Former Term Loan, and to pay $28.0 million in financing costs which have been recorded as Deferred financing costs, net in the accompanying Consolidated Balance Sheets.

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 U.S. Credit Facility and the 9.0% Senior Secured First Lien Notes, and senior to those securing the Senior Secured Second Lien Notes.

On or after March 15, 2017, the Company may redeem the 6.125% Senior Secured First Lien Notes at its option, subject to certain notice provisions, at the following redemption prices (expressed as a percentage of principal amount), plus accrued and unpaid interest to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the twelve-month period commencing on March 15 of the years set forth below:


Period	Redemption Price
2017		103.063	%
2018		101.531	%
2019 and thereafter		100.000	%

In addition, prior to March 15, 2016, the Company may redeem in the aggregate up to 35% of the original aggregate principal amount of the 6.125% Senior Secured First Lien Notes with the net cash proceeds of certain equity offerings at a redemption price of 106.125%, plus accrued and unpaid interest. The Company may also redeem the 6.125% Senior Secured First Lien Notes prior to March 15, 2017, subject to certain notice periods, at a price equal to 100% of the principal amount of the 6.125% Senior Secured First Lien Notes redeemed plus an applicable premium and accrued and unpaid interest.

The Company used approximately $61.7 million of the net proceeds of the offering of the 6.125% Senior Secured First Lien Notes to purchase approximately $60.5 million aggregate principal amount of the Company’s 9.25% Senior Fixed Rate Notes due 2015 and 9.625%/10.375% Senior Toggle Notes due 2015 (collectively, the “Senior Notes”), and to pay related fees and premiums pursuant to a tender offer for such Senior Notes, including $4.0 million in financing costs which have been recorded as “Deferred financing costs, net” in the accompanying Consolidated Balance Sheets. The remaining net proceeds, together with cash on hand, were used to repurchase the remaining outstanding $149.5 million aggregate principal amount of Senior Notes on June 3, 2013, pursuant to the redemption provisions applicable to the Senior Notes.

7.75% Senior Notes

On May 14, 2013, the Company issued $320.0 million aggregate principal amount of the 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 U.S. 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.

On or after June 1, 2016, the Company may redeem the 7.75% Senior Notes at its option, subject to certain notice provisions, at the following redemption prices (expressed as a percentage of principal amount), plus accrued and unpaid interest to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the twelve-month period commencing on June 1 of the years set forth below:


Period	Redemption Price
2016		103.875	%
2017		101.938	%
2018 and thereafter		100.000	%

Prior to June 1, 2016, the Company may redeem in the aggregate up to 35% of the original aggregate principal amount of the 7.75% Senior Notes with the net cash proceeds of certain equity offerings other than an initial public offering that is consummated prior to December 1, 2014, at a redemption price of 107.750%, plus accrued and unpaid interest. In addition, within sixty days of the closing of an initial public offering occurring prior to December 1, 2014, the Company may redeem in the aggregate up to 100% of the original aggregate principal amount of the 7.75% Senior Notes, at a redemption price of 103.000%, plus accrued and unpaid interest.

The Company may also redeem the 7.75% Senior Notes prior to June 1, 2016, subject to certain notice periods, at a price equal to 100% of the principal amount of the 7.75% Senior Notes redeemed plus an applicable premium and accrued and unpaid interest.

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 and Gain (Loss) in Early Debt Extinguishment

The following is a summary of the Company’s note repurchase activity during Fiscal 2013 (in thousands). All debt repurchases in Fiscal 2013 were pursuant to the tender offer and note redemptions described above. There were no debt repurchase activities during Fiscal 2014 and Fiscal 2012.


	Fiscal 2013
	Principal		Repurchase		Recognized
Notes Repurchased	Amount		Price		Loss (1)
9.25% Senior Fixed Rate Notes due 2015 (the “Senior Fixed Rate Notes”)	$	220,270	$	219,802	$	2,597
9.625%/10.375% Senior Toggle Notes due 2015 (the “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 Fiscal 2012, the Company recognized a $9.7 million loss on early debt extinguishment attributed to the write-off of unamortized debt issuance costs associated with the early repayment of indebtedness under the Former Term Loan facility and replacement of the $200.0 million Former Revolver.

U.S. Revolving Credit Facility and Note Covenants

Our U.S. Credit Facility and Senior Subordinated Notes, Senior Secured Lien Notes, 9.0% Senior Secured First Lien Notes, 6.125% Senior Secured First Lien Notes and 7.75% Senior Notes (collectively, the “Notes”) contain certain covenants that, among other things, 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 the Company’s subsidiaries;

•

transfer or sell assets;

•

engage in certain transactions with its affiliates; and

•

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

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 the covenants under the Notes, however, require the Company to maintain any particular financial ratio or other measure of financial performance.

The U.S. 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 is required to maintain, at each borrowing date measured at the end of the prior fiscal quarter (but reflecting borrowings and repayments under the U.S. Credit Facility through the measurement date) and at the end of each quarter, a maximum Total Net Secured Leverage Ratio of 6.0:1.0 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.

Europe Revolving Credit Facility

On October 2, 2014, certain of the European subsidiaries of the Company entered into an unsecured euro denominated multi-currency revolving credit facility (the “Europe Credit Facility”) in the amount of €35.0 million that will terminate on August 20, 2017. Loans under the Europe Credit Facility will bear interest at 2.50% per annum plus the Euro Interbank Offered Rate as in effect for interest periods of one, three or six months or any other period agreed upon. The Europe Credit Facility also provides for a facility fee of 0.875% per annum on the unused amount of the facility.

All obligations under the Europe Credit Facility are unconditionally and fully guaranteed by Claire’s (Gibraltar) Holdings Ltd. (“Claire’s Gibraltar”) and certain of its existing direct or indirect wholly-owned European subsidiaries, subject to certain exceptions and limitations.

The Europe Credit Facility contains customary affirmative and negative covenants applicable to Claire’s Gibraltar and its subsidiaries, events of default and provisions relating to mandatory and voluntary payments, which include an annual requirement that for at least 5 successive Business Days in each year no loans under the Europe Credit Facility may be outstanding. The Europe Credit Facility also contains covenants that require Claire’s Gibraltar to maintain particular financial ratios so long as any amounts are outstanding under the facility: a Fixed Charge Cover Ratio not lower than 1.5:1.0 based upon the ratio of adjusted earnings before interest, taxes, depreciation, amortization, and rent to net interest and rent for each period of four consecutive fiscal quarters and a Leverage Ratio not more than 1.5:1.0 based upon the ratio of net debt to adjusted earnings before interest, taxes, depreciation and amortization for each period of four consecutive fiscal quarters. As of January 31, 2015, there were no borrowings outstanding under the Europe Credit Facility.

See Note 2 – Fair Value Measurements for related fair value disclosure on debt.

Europe Bank Credit Facilities

The Company’s non-U.S. subsidiaries have bank credit facilities totaling approximately $2.4 million. The facilities are used for working capital requirements, letters of credit and various guarantees. These credit facilities have been arranged in accordance with customary lending practices in the respective country of operation. As of January 31, 2015, there was a reduction of $2.3 million for outstanding bank guarantees, which reduces the borrowing availability to $0.1 million as of that date.