Loans, overdrafts and long-term debt

12 Months Ended

Feb. 01, 2020



(in millions)	February 1, 2020			February 2, 2019
Debt:
Senior Notes, net of unamortized discount	$	147.5		$	399.0
ABL Revolving Facility	270.0			—
FILO term loan facility	100.0			—
Senior unsecured term loan	—			294.9
Other loans and bank overdrafts	95.6			40.1
Gross debt	$	613.1		$	734.0
Less: Current portion of loans and overdrafts	(95.6		)	(78.8		)
Less: Unamortized debt issuance costs	(1.6		)	(5.6		)
Total long-term debt	$	515.9		$	649.6

The annual aggregate maturities of our debt (excluding the impact of debt issuance costs) for the five years subsequent to February 1, 2020 are presented below.



(in millions)
Fiscal 2021	$	63.1
Fiscal 2022	—
Fiscal 2023	—
Fiscal 2024	370.0
Fiscal 2025	147.5
Thereafter	—
Gross Debt	$	580.6

Revolving credit facility and term loan (the “Credit Facility”)

On September 27, 2019, in connection with the issuance of a new senior secured asset-based credit facility, the Company repaid and terminated the Credit Facility. Refer to the “Asset-based credit facility” section below. The original maturity of the Credit Facility was July 2021. Unamortized debt issuance costs of $2.0 million associated with the Credit Facility were written-off during Fiscal 2020 upon executing the termination of the Credit Facility. This expense was recognized as a cost of extinguishment of the Credit Facility and was recorded within other non-operating income, net, in the consolidated statements of operations.

Senior unsecured notes due 2024

On May 19, 2014, Signet UK Finance plc (“Signet UK Finance”), a wholly owned subsidiary of the Company, issued $400 million aggregate principal amount of its 4.70% senior unsecured notes due in 2024 (the “Senior Notes”). The Senior Notes were issued under an effective registration statement previously filed with the SEC. Interest on the Senior Notes is payable semi-annually on June 15 and December 15 of each year. The Senior Notes are jointly and severally guaranteed, on a full and unconditional basis, by the Company and by certain of the Company’s wholly owned subsidiaries (such subsidiaries, the “Guarantors”). See Note 28 of Item 8 for additional information. The Senior Notes were issued pursuant to a base indenture among the Company, Signet UK Finance, the Guarantors and Deutsche Bank Trust Company Americas as trustee, with the indenture containing customary covenants and events of default provisions.

On September 5, 2019, Signet UK Finance announced the commencement of a tender offer to purchase any and all of its outstanding Senior Notes (the “Tender Offer”). Upon receipt of the requisite consents from Senior Note holders, Signet UK Finance entered into a supplemental indenture which eliminated most of the restrictive covenants and certain default provisions of the indenture. The supplemental indenture became operative on September 27, 2019 upon the Company’s acceptance and payment for the Senior Notes previously validly tendered and not validly withdrawn pursuant to the Tender Offer for an aggregate principal amount of $239.6 million, which represented a purchase price of $950.00 per $1,000.00 in principal amount of the Senior Notes validly tendered. The Company recognized a net gain on extinguishment of the validly tendered Senior Notes in Fiscal 2020 of $8.2 million, net of $1.9 million in third party fees and $2.6 million in write-off of unamortized debt issuance costs and original issue discount. This net gain was recorded within other non-operating income, net, in the consolidated statements of operations.

Unamortized debt issuance costs relating to the Notes as of February 1, 2020 was $1.1 million (February 2, 2019: $3.7 million). The remaining unamortized debt issuance costs are recorded as a direct deduction from the outstanding liability within the consolidated balance sheets. Amortization relating to debt issuance costs of $0.6 million was recorded as interest expense in the consolidated statements of operations in Fiscal 2020 ($0.7 million during Fiscal 2019 and Fiscal 2018).

Asset-based credit facility

On September 27, 2019, the Company entered into a senior secured asset-based credit facility consisting of (i) a revolving credit facility in an aggregate committed amount of $1.5 billion (“ABL Revolving Facility”) and (ii) a first-in last-out term loan facility in an aggregate principal amount of $100.0 million (the “FILO Term Loan Facility” and, together with the ABL Revolving Facility, the “ABL Facility”) pursuant to that certain credit agreement. The ABL Facility will mature on September 27, 2024.

Revolving loans under the ABL Revolving Facility are available in an aggregate amount equal to the lesser of the aggregate ABL revolving commitments and a borrowing base determined based on the value of certain inventory and credit card receivables, subject to specified advance rates and reserves. Indebtedness under the ABL Facility is secured by substantially all of the assets of the Company and its subsidiaries, subject to customary exceptions. Borrowings under the ABL Revolving Facility and the FILO Term Loan Facility, as applicable, bear interest at the Company’s option at either eurocurrency rate plus the applicable margin or a base rate plus the applicable margin, in each case depending on the excess availability under the ABL Revolving Facility. As of February 1, 2020, the interest rate on the ABL Revolving Facility was 2.8%, and the interest rate on the FILO Term Loan Facility was 3.6%. The Company had stand-by letters of credit outstanding of $14.9 million on the ABL Revolving Facility as of February 1, 2020. The Company had available borrowing capacity of $1.2 billion on the ABL Revolving Facility as of February 1, 2020.

If the excess availability under the ABL Revolving Facility falls below the threshold specified in the ABL Facility agreement, the Company will be required to maintain a fixed charge coverage ratio of not less than 1.00 to 1.00. As of February 1, 2020, the threshold related to the fixed coverage ratio was approximately $150 million. The ABL Facility places certain restrictions upon the Company’s ability to, among other things, incur additional indebtedness, pay dividends, grant liens and make certain loans, investments and divestitures. This payment restrictions threshold was approximately $260 million as of February 1, 2020. The ABL Facility contains customary events of default (including payment defaults, cross-defaults to certain of our other indebtedness, breach of representations and covenants and change of control). The occurrence of an event of default under the ABL Facility would permit the lenders to accelerate the indebtedness and terminate the ABL Facility.

Debt issuance costs relating to the ABL Facility totaled $9.3 million, of which $8.7 million of these costs were allocated to the ABL Revolving Facility and $0.6 million was allocated to the FILO Term Loan Facility. The remaining unamortized debt issuance costs for the ABL Revolving Facility are recorded within other assets in the consolidated balance sheets and the remaining unamortized debt issuance costs for the FILO Term Loan Facility are recorded as a direct deduction from the outstanding liability within the consolidated balance sheets. Amortization relating to the ABL Facility debt issuance costs of $0.6 million was recorded as interest expense in the consolidated statements of operations for Fiscal 2020.

Asset-backed securitization facility

The Company sold an undivided interest in certain credit card receivables to Sterling Jewelers Receivables Master Note Trust (the “Issuer”) and issued two-year revolving asset-backed variable funding notes. As a condition of closing the credit transaction disclosed in Note 4, during the third quarter of Fiscal 2018, the Company terminated the asset-backed securitization facility, which had a principal balance outstanding of $600 million, in order to transfer the receivables free and clear. Unamortized capitalized fees of $0.2 million associated with the asset-backed securitization facility were written-off during the third quarter of Fiscal 2018. Capitalized fees previously totaled $3.4 million, offset by accumulated amortization of $3.4 million as of February 3, 2018. Amortization relating to these fees of $0.3 million was recorded as interest expense in the consolidated statement of operations for Fiscal 2018.

Unsecured term loan (the “Bridge Loan”)

In conjunction with the acquisition of R2Net, Signet entered into a $350.0 million unsecured term loan to finance the transaction. The Company executed and repaid the Bridge Loan during the 13 weeks ended October 28, 2017. The Bridge Loan contained customary fees in addition to interest incurred on borrowings. Fees incurred of $1.4 million and interest of $0.9 million relating to the Bridge Loan were expensed during Fiscal 2018.

Other

As of February 1, 2020 and February 2, 2019, the Company was in compliance with all debt covenants.

As of February 1, 2020 and February 2, 2019, there were $87.5 million and $40.1 million in overdrafts, respectively, which represent issued and outstanding checks where no bank balances exist with the right of offset.