Debt

3 Months Ended

Apr. 30, 2020

DEBT



(in millions)	April 30, 2020		January 31, 2020		April 30, 2019
Short-term borrowings:
Credit Facilities	$	513.6	$	13.8	$	30.1
Other credit facilities	138.3		134.1		112.0
	$	651.9	$	147.9	$	142.1



Long-term debt:
Unsecured Senior Notes:
2012 4.40% Series B Senior Notes, due July 2042 ^a	$	250.0		$	250.0		$	250.0
2014 3.80% Senior Notes, due October 2024 ^{b, c}	250.0			250.0			250.0
2014 4.90% Senior Notes, due October 2044 ^{b, c}	300.0			300.0			300.0
2016 0.78% Senior Notes, due August 2026 ^{b, d}	93.8			91.9			89.5
	893.8			891.9			889.5
Less: unamortized discounts and debt issuance costs	(7.7		)	(7.8		)	(8.3		)
	$	886.1		$	884.1		$	881.2


^a	The agreements governing these Senior Notes require repayments of $50.0 million in aggregate every five years beginning in July 2022.


^b	These agreements require lump sum repayments upon maturity.


^c	These Senior Notes were issued at a discount, which will be amortized until the debt maturity.


^d	These Senior Notes were issued at par, ¥10.0 billion.

On October 25, 2018, Registrant, along with certain of its subsidiaries designated as borrowers thereunder, entered into a five-year multi-bank, multi-currency committed unsecured revolving credit facility, including a letter of credit subfacility, consisting of basic commitments in an amount up to $750.0 million (which commitments may be increased, subject to certain conditions and limitations, at the request of Registrant) (the "Credit Facility"). During the three months ended April 30, 2020, the Company drew down $500.0 million on its Credit Facility as a precautionary measure in order to increase its cash position and maintain financial flexibility in light of uncertainty in the global markets resulting from COVID-19. This drawdown was permitted under the Merger Agreement.

At April 30, 2020, the Company was in compliance with all debt covenants.

The agreements governing certain of the Company's material debt instruments include covenants that incorporate a (i) debt incurrence test premised on a fixed charge coverage ratio, which is the ratio of the Company's EBIT (earnings before interest and taxes) plus rent expense to its interest expense plus rent expense, and (ii) leverage ratio, which is the ratio of the Company's total adjusted debt to its consolidated EBITDAR (earnings before interest, taxes, depreciation, amortization and rent expenses). Specifically, under the terms of the Company's Senior Notes due 2026 and 2042, the Company is restricted from incurring, or permitting its subsidiaries to incur, indebtedness if, among other conditions, the Company's fixed charge coverage ratio is less than 2.0 to 1.0. Under the terms of the Credit Facility, the Guaranty in respect of the three-year, multi-bank revolving credit agreement entered into by the Company's wholly owned subsidiary, Tiffany & Co. (Shanghai) Commercial Company Limited (the "Shanghai Guaranty"), and the Company's Senior Notes due 2026 and 2042, the Company is required to maintain a maximum leverage ratio of 3.50 to 1.00 for the four quarter period ending as of the end of each fiscal quarter.

Based on the Company's forecasts and plans, the Company expected to remain in compliance with the leverage ratio financial maintenance covenant, although the impact of COVID-19 on the Company's EBIT could increase that leverage ratio. The Company also expected that it would not meet the fixed charge coverage ratio test for incurrence of additional debt under its Senior Notes as of the end of the second fiscal quarter of fiscal 2020, although it did not expect to need to incur additional debt within the next 12 months. Nonetheless, as a precautionary measure in order to maintain flexibility with respect to its liquidity sources and provide additional financial maintenance covenant headroom, the Company entered into amendments to its Credit Facility, the Shanghai Guaranty, and its Senior Notes due 2026 and 2042, in order to modify the financial maintenance covenant and, in the case of the Senior Notes due 2026 and 2042, the fixed charge coverage ratio test for debt incurrence, through and including the Company's fiscal quarter ending April 30, 2021. These amendments are permitted under the Merger Agreement.

These amendments were executed on June 8, 2020 and effect changes to certain provisions and covenants during the period beginning with the fiscal quarter ending July 31, 2020 and continuing through the fiscal quarter ending April 30, 2021 (such period of time, the "Covenant Relief Period"), including, among others: (a) an increase in the maximum leverage ratio under the Credit Facility, the Shanghai Guaranty, and the 2026 and 2042 Senior Notes, to 4.50 to 1.00; and (b) a reduction of the fixed charge coverage ratio in the 2026 and 2042 Senior Notes to 0.75 to 1.00.

During the Covenant Relief Period, the facility fee under the Credit Facility will be increased by 5 basis points at all pricing levels, and the applicable margin will be increased by (i) 10 basis points at all pricing levels through the quarter ending July 31, 2020, (ii) 20 basis points at all pricing levels from August 1, 2020 until November 1, 2020 and (iii) 30 basis points at all pricing levels from November 1, 2020 through April 30, 2021. The coupon rate under the 2026 and 2042 Senior Notes will be increased by 25 basis points during the Covenant Relief Period. The Company has the right to terminate the Covenant Relief Period under the Credit Facility, Shanghai Guaranty and the 2026 and 2042 Senior Notes, including the attendant covenant and pricing modifications referenced above, prior to April 30, 2021, subject to the Company's certification that its leverage ratio does not exceed 3.50 to 1.00 at such time.