LTD » Topics » 14. Long-term Debt

This excerpt taken from the LTD 8-K filed Jun 15, 2009.

14. Long-term Debt

The following table provides the Company’s long-term debt balance as of January 31, 2009 and February 2, 2008:

 

     January 31,
2009
   February 2,
2008
 
     (in millions)  

Term Loan due August 2012. Variable Interest Rate of 3.99% as of January 31, 2009

   $ 750    $ 750   

$700 million, 6.90% Fixed Interest Rate Notes due July 2017, Less Unamortized Discount

     698      698   

$500 million, 5.25% Fixed Interest Rate Notes due November 2014, Less Unamortized Discount

     499      499   

$350 million, 6.95% Fixed Interest Rate Debentures due March 2033, Less Unamortized Discount

     350      350   

$300 million, 7.60% Fixed Interest Rate Notes due July 2037, Less Unamortized Discount

     299      299   

$300 million, 6.125% Fixed Interest Rate Notes due December 2012, Less Unamortized Discount

     299      299   

Credit Facility due January 2010

     —        15   

5.30% Mortgage due August 2010

     2      2   
               

Total

     2,897      2,912   

Current Portion of Long-term Debt

     —        (7
               

Total Long-term Debt, net of Current Portion

   $ 2,897    $ 2,905   
               

In July 2007, the Company issued $700 million of 6.90% notes due July 15, 2017 and $300 million of 7.60% notes due July 15, 2037 utilizing a shelf registration statement under which up to $1 billion of debt securities, common and preferred stock and other securities could be issued. Interest on the notes is payable on January 15 and July 15 of each year.

On August 3, 2007, the Company amended the October 2004 $500 million term loan agreement to increase the borrowing capacity to $750 million and extend the term to August 2012. During the second quarter of 2007, the Company borrowed the additional $250 million under the term loan agreement.

 

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On August 3, 2007, the Company amended its $1 billion unsecured revolving credit facility (the “5-Year Facility”) by extending its term to August 2012 and executed a $500 million, 364-day unsecured revolving credit facility (the “364-Day Facility”). On July 11, 2008, the Company renewed the 364-Day Facility and reduced its size to $300 million. Both facilities support the Company’s commercial paper and letter of credit programs. As of January 31, 2009, there were no borrowings outstanding under either facility and no commercial paper outstanding. Fees payable under the 5-Year Facility are based on the Company’s long-term credit ratings and were 0.15% of the committed amount per year as of January 31, 2009. Fees payable under the 364-Day Facility are also based on the Company’s long-term credit ratings and were 0.35% of the committed amount per year as of January 31, 2009.

In January 2006, Mast Industries (Far East) Limited, a wholly owned subsidiary of Limited Brands, Inc., entered into a $60 million unsecured revolving credit facility. During 2006, $30 million was drawn on the facility while the remaining $30 million expired in March 2006. The credit facility was available for general corporate purposes including the funding of dividends to Limited Brands, Inc. Borrowings under the credit facility are due in equal semi-annual installments through the maturity date of the credit facility in January 2010. In October 2008, the Company repaid the Credit Facility due January 2010 and the related current portion of long-term debt.

The facilities and the Term Loan have several interest rate options, which are based in part on the Company’s long-term credit ratings. These agreements also require the Company to maintain certain specified fixed charge coverage and leverage ratios and prohibit certain types of liens on property or assets. The Company was in compliance with the covenant requirements as of January 31, 2009.

In January 2008, the Company entered into a participating interest rate swap arrangement designated as a cash flow hedge to mitigate exposure to interest rate fluctuations related to the Term Loan. The participating interest rate swap limits the Company’s exposure to increases in the benchmark interest rate while allowing the Company to partially participate in any decreases in the benchmark interest rate. For additional information, See Note 4, “Derivative Instruments.”

On February 19, 2009, the Company amended its 5-Year Facility, amended its Term Loan and canceled its 364-Day Facility. For additional information, see Note 22, “Subsequent Event.”

The following table provides principal payments due on long-term debt in the next five fiscal years and the remaining years thereafter:

 

Fiscal Year (in millions)

    

2009

   $ —  

2010

     2

2011

     —  

2012

     1,050

2013

     —  

Thereafter

     1,850

Cash paid for interest was $174 million in 2008, $151 million in 2007 and $100 million in 2006.

This excerpt taken from the LTD 10-Q filed Jun 5, 2009.

15. Long-term Debt

The following table provides the Company’s long-term debt balance as of May 2, 2009, January 31, 2009 and May 3, 2008:

 

     May 2,
2009
   January 31,
2009
   May 3,
2008
 
     (in millions)  

Term Loan due August 2012. Variable Interest Rate of 5.18% as of May 2, 2009

   $ 750    $ 750    $ 750  

$700 million, 6.90% Fixed Interest Rate Notes due July 2017, Less Unamortized Discount

     698      698      698  

$500 million, 5.25% Fixed Interest Rate Notes due November 2014, Less Unamortized Discount

     499      499      499  

$350 million, 6.95% Fixed Interest Rate Debentures due March 2033, Less Unamortized Discount

     350      350      350  

$300 million, 7.60% Fixed Interest Rate Notes due July 2037, Less Unamortized Discount

     299      299      299  

$300 million, 6.125% Fixed Interest Rate Notes due December 2012, Less Unamortized Discount

     299      299      299  

Credit Facility due January 2010

     —        —        15  

5.30% Mortgage due August 2010

     2      2      2  
                      

Total

     2,897      2,897      2,912  

Current Portion of Long-term Debt

     —        —        (7 )
                      

Total Long-term Debt, Net of Current Portion

   $ 2,897    $ 2,897    $ 2,905  
                      

On February 19, 2009, the Company amended its $1 billion unsecured revolving credit facility expiring in August 2012 (the “5-Year Facility”), amended its $750 million term loan maturing in August 2012 (“Term Loan”) and canceled its $300 million, 364-day unsecured revolving credit facility. The amendment to the 5-Year Facility and the Term Loan includes changes to both the fixed charge coverage and leverage covenants. Under the amended covenants, the Company is required to maintain the fixed charge coverage ratio at 1.60 or above through fiscal year 2010 and 1.75 or above thereafter. The leverage ratio, which is debt compared to

 

15


Table of Contents

EBITDA, as those terms are defined in the agreement, must not exceed 5.0 through the third quarter of fiscal year 2010, 4.5 from the fourth quarter of fiscal year 2010 through the third quarter of fiscal year 2011 and 4.0 thereafter. The Company was in compliance with the covenant requirements as of May 2, 2009. The amendment also increases the interest costs and fees associated with the 5-Year Facility and the Term Loan, provides for certain security interests as defined in the agreement and limits dividends, share repurchases and other restricted payments as defined in the agreement to $220 million per year with certain potential increases as defined in the agreement. The amendment does not impact the maturity dates of either the 5-Year Facility or the Term Loan.

The Company incurred $19 million in fees related to the amendment of the 5-Year Facility and the Term Loan. Pursuant to Emerging Issues Task Force (“EITF”) 98-14, Debtor’s Accounting for Changes in Line-of-Credit or Revolving-Debt Arrangements, fees of $11 million were capitalized associated with the 5-Year Facility amendment. These capitalized costs will be amortized over the remaining term of the 5-Year Facility. This cost is included within Other Assets on the May 2, 2009 Consolidated Balance Sheet. Pursuant to EITF 96-19, Debtor’s Accounting for a Modification or Exchange of Debt Instruments, fees of $8 million associated with the Term Loan amendment were expensed in addition to $2 million of unamortized fees related to the original agreement. These charges are included within Interest Expense on the 2009 Consolidated Statement of Income.

The 5-Year Facility supports the Company’s commercial paper and letter of credit programs. Fees payable under the 5-Year Facility are based on the Company’s long-term credit ratings and are currently 0.75% of the committed and unutilized amounts per year and 4.00% on any outstanding borrowings or letters of credit. As of May 2, 2009, there were no borrowings outstanding under the facility. The Company has $84 million of outstanding letters of credit as of May 2, 2009 that reduce its remaining availability under its amended credit agreements. No commercial paper was outstanding as of May 2, 2009, January 31, 2009 or May 3, 2008.

In January 2008, the Company entered into a participating interest rate swap arrangement designated as a cash flow hedge to mitigate exposure to interest rate fluctuations related to the Term Loan. For additional information, see Note 5, “Derivative Instruments.”

These excerpts taken from the LTD 10-K filed Mar 27, 2009.

14. Long-term Debt

The following table provides the Company’s long-term debt balance as of January 31, 2009 and February 2, 2008:

 

     January 31,
2009
   February 2,
2008
 
     (in millions)  

Term Loan due August 2012. Variable Interest Rate of 3.99% as of January 31, 2009

   $ 750    $ 750  

$700 million, 6.90% Fixed Interest Rate Notes due July 2017, Less Unamortized Discount

     698      698  

$500 million, 5.25% Fixed Interest Rate Notes due November 2014, Less Unamortized Discount

     499      499  

$350 million, 6.95% Fixed Interest Rate Debentures due March 2033, Less Unamortized Discount

     350      350  

$300 million, 7.60% Fixed Interest Rate Notes due July 2037, Less Unamortized Discount

     299      299  

$300 million, 6.125% Fixed Interest Rate Notes due December 2012, Less Unamortized Discount

     299      299  

Credit Facility due January 2010

          15  

5.30% Mortgage due August 2010

     2      2  
               

Total

     2,897      2,912  

Current Portion of Long-term Debt

          (7 )
               

Total Long-term Debt, net of Current Portion

   $ 2,897    $ 2,905  
               

In July 2007, the Company issued $700 million of 6.90% notes due July 15, 2017 and $300 million of 7.60% notes due July 15, 2037 utilizing a shelf registration statement under which up to $1 billion of debt securities, common and preferred stock and other securities could be issued. Interest on the notes is payable on January 15 and July 15 of each year.

On August 3, 2007, the Company amended the October 2004 $500 million term loan agreement to increase the borrowing capacity to $750 million and extend the term to August 2012. During the second quarter of 2007, the Company borrowed the additional $250 million under the term loan agreement.

On August 3, 2007, the Company amended its $1 billion unsecured revolving credit facility (the “5-Year Facility”) by extending its term to August 2012 and executed a $500 million, 364-day unsecured revolving credit facility (the “364-Day Facility”). On July 11, 2008, the Company renewed the 364-Day Facility and reduced its size to $300 million. Both facilities support the Company’s commercial paper and letter of credit programs. As of January 31, 2009, there were no borrowings outstanding under either facility and no commercial paper outstanding. Fees payable under the 5-Year Facility are based on the Company’s long-term credit ratings and were 0.15% of the committed amount per year as of January 31, 2009. Fees payable under the 364-Day Facility are also based on the Company’s long-term credit ratings and were 0.35% of the committed amount per year as of January 31, 2009.

In January 2006, Mast Industries (Far East) Limited, a wholly owned subsidiary of Limited Brands, Inc., entered into a $60 million unsecured revolving credit facility. During 2006, $30 million was drawn on the facility while the remaining $30 million expired in March 2006. The credit facility was available for general corporate purposes including the funding of dividends to Limited Brands, Inc. Borrowings under the credit facility are due in equal semi-annual installments through the maturity date of the credit facility in January 2010. In October 2008, the Company repaid the Credit Facility due January 2010 and the related current portion of long-term debt.

 

78


 

The facilities and the Term Loan have several interest rate options, which are based in part on the Company’s long-term credit ratings. These agreements also require the Company to maintain certain specified fixed charge coverage and leverage ratios and prohibit certain types of liens on property or assets. The Company was in compliance with the covenant requirements as of January 31, 2009.

In January 2008, the Company entered into a participating interest rate swap arrangement designated as a cash flow hedge to mitigate exposure to interest rate fluctuations related to the Term Loan. The participating interest rate swap limits the Company’s exposure to increases in the benchmark interest rate while allowing the Company to partially participate in any decreases in the benchmark interest rate. For additional information, See Note 4, “Derivative Instruments.”

On February 19, 2009, the Company amended its 5-Year Facility, amended its Term Loan and canceled its 364-Day Facility. For additional information, see Note 22, “Subsequent Event.”

The following table provides principal payments due on long-term debt in the next five fiscal years and the remaining years thereafter:

 

Fiscal Year (in millions)

    

2009

   $

2010

     2

2011

    

2012

     1,050

2013

    

Thereafter

     1,850

Cash paid for interest was $174 million in 2008, $151 million in 2007 and $100 million in 2006.

14. Long-term Debt

SIZE="2">The following table provides the Company’s long-term debt balance as of January 31, 2009 and February 2, 2008:

 























































































































































   January 31,
2009
  February 2,
2008
 
   (in millions) 

Term Loan due August 2012. Variable Interest Rate of 3.99% as of January 31, 2009

  $750  $750 

$700 million, 6.90% Fixed Interest Rate Notes due July 2017, Less Unamortized Discount

   698   698 

$500 million, 5.25% Fixed Interest Rate Notes due November 2014, Less Unamortized Discount

   499   499 

$350 million, 6.95% Fixed Interest Rate Debentures due March 2033, Less Unamortized Discount

   350   350 

$300 million, 7.60% Fixed Interest Rate Notes due July 2037, Less Unamortized Discount

   299   299 

$300 million, 6.125% Fixed Interest Rate Notes due December 2012, Less Unamortized Discount

   299   299 

Credit Facility due January 2010

      15 

5.30% Mortgage due August 2010

   2   2 
         

Total

   2,897   2,912 

Current Portion of Long-term Debt

      (7)
         

Total Long-term Debt, net of Current Portion

  $2,897  $2,905 
         

In July 2007, the Company issued $700 million of 6.90% notes due July 15, 2017 and $300 million of 7.60%
notes due July 15, 2037 utilizing a shelf registration statement under which up to $1 billion of debt securities, common and preferred stock and other securities could be issued. Interest on the notes is payable on January 15 and
July 15 of each year.

On August 3, 2007, the Company amended the October 2004 $500 million term loan agreement to increase the borrowing
capacity to $750 million and extend the term to August 2012. During the second quarter of 2007, the Company borrowed the additional $250 million under the term loan agreement.

FACE="Times New Roman" SIZE="2">On August 3, 2007, the Company amended its $1 billion unsecured revolving credit facility (the “5-Year Facility”) by extending its term to August 2012 and executed a $500 million, 364-day unsecured
revolving credit facility (the “364-Day Facility”). On July 11, 2008, the Company renewed the 364-Day Facility and reduced its size to $300 million. Both facilities support the Company’s commercial paper and letter of credit
programs. As of January 31, 2009, there were no borrowings outstanding under either facility and no commercial paper outstanding. Fees payable under the 5-Year Facility are based on the Company’s long-term credit ratings and were 0.15% of
the committed amount per year as of January 31, 2009. Fees payable under the 364-Day Facility are also based on the Company’s long-term credit ratings and were 0.35% of the committed amount per year as of January 31, 2009.


In January 2006, Mast Industries (Far East) Limited, a wholly owned subsidiary of Limited Brands, Inc., entered into a $60 million unsecured revolving credit
facility. During 2006, $30 million was drawn on the facility while the remaining $30 million expired in March 2006. The credit facility was available for general corporate purposes including the funding of dividends to Limited Brands, Inc.
Borrowings under the credit facility are due in equal semi-annual installments through the maturity date of the credit facility in January 2010. In October 2008, the Company repaid the Credit Facility due January 2010 and the related current portion
of long-term debt.

 


78








 

The facilities and the Term Loan have
several interest rate options, which are based in part on the Company’s long-term credit ratings. These agreements also require the Company to maintain certain specified fixed charge coverage and leverage ratios and prohibit certain types of
liens on property or assets. The Company was in compliance with the covenant requirements as of January 31, 2009.

In January 2008, the Company
entered into a participating interest rate swap arrangement designated as a cash flow hedge to mitigate exposure to interest rate fluctuations related to the Term Loan. The participating interest rate swap limits the Company’s exposure to
increases in the benchmark interest rate while allowing the Company to partially participate in any decreases in the benchmark interest rate. For additional information, See Note 4, “Derivative Instruments.”

STYLE="margin-top:12px;margin-bottom:0px">On February 19, 2009, the Company amended its 5-Year Facility, amended its Term Loan and canceled its 364-Day Facility. For additional information, see Note
22, “Subsequent Event.”

The following table provides principal payments due on long-term debt in the next five fiscal years and the remaining
years thereafter:

 











































Fiscal Year (in millions)

   

2009

  $

2010

   2

2011

   

2012

   1,050

2013

   

Thereafter

   1,850

Cash paid for interest was $174 million in 2008, $151 million in 2007 and $100
million in 2006.

This excerpt taken from the LTD 10-Q filed Dec 5, 2008.

12. Long-term Debt

The following table provides the Company’s long-term debt balance as of November 1, 2008, February 2, 2008 and November 3, 2007:

 

     November 1,
2008
   February 2,
2008
    November 3,
2007
 
     (in millions)  

Term Loan due August 2012. Interest Rate of 3.43% as of November 1, 2008

   $ 750    $ 750     $ 750  

6.90% $700 million Notes due July 2017, Less Unamortized Discount

     698      698       698  

5.25% $500 million Notes due November 2014, Less Unamortized Discount

     499      499       499  

6.95% $350 million Debentures due March 2033, Less Unamortized Discount

     350      350       350  

7.60% $300 million Notes due July 2037, Less Unamortized Discount

     299      299       299  

6.125% $300 million Notes due December 2012, Less Unamortized Discount

     299      299       299  

Credit Facility due January 2010

     —        15       19  

5.30% Mortgage due August 2010

     2      2       2  
                       

Total

     2,897      2,912       2,916  

Current Portion of Long-term Debt

     —        (7 )     (8 )
                       

Total Long-term Debt, Net of Current Portion

   $ 2,897    $ 2,905     $ 2,908  
                       

 

12


Table of Contents

In July 2007, the Company issued $700 million of 6.90% notes due July 15, 2017 and $300 million of 7.60% notes due July 15, 2037 utilizing a shelf registration statement under which up to $1 billion of debt securities, common and preferred stock and other securities could be issued. Interest on the notes is payable on January 15 and July 15 of each year.

On August 3, 2007, the Company amended the October 2004 $500 million Term Loan agreement to increase the borrowing capacity to $750 million and extend the term to August 2012. During the second quarter of 2007, the Company borrowed the additional $250 million under the Term Loan agreement.

On August 3, 2007, the Company amended its $1 billion unsecured revolving credit facility (the “5-Year Facility”) by extending its term to August 2012 and executed a $500 million, 364-day unsecured revolving credit facility (the “2007 364-Day Facility”), which terminated in July 2008. In July 2008, the Company replaced the 2007 364-Day Facility with a $300 million 364-day unsecured revolving credit facility (the “2008 364-Day Facility”). Both facilities support the Company’s commercial paper and letter of credit programs. As of November 1, 2008, there were no borrowings outstanding under any facility. Fees payable under the 5-Year Facility are based on the Company’s long-term credit ratings and are currently 0.125% of the committed amount per year. Fees payable under the 2008 364-Day Facility are based on the Company’s long-term credit ratings and are 0.25% of the committed amount.

In October 2008, the Company repaid the Credit Facility due January 2010 and the related current portion of long-term debt.

No commercial paper was outstanding as of November 1, 2008, February 2, 2008 or November 3, 2007.

The Facilities and the Term Loan have several interest rate options which are based in part on the Company’s long-term credit ratings. These agreements also require the Company to maintain certain specified fixed charge and debt-to-earnings ratios and prohibit certain types of liens on property or assets. The Company was in compliance with the covenant requirements as of November 1, 2008.

In January 2008, the Company entered into a participating interest rate swap arrangement designated as a cash flow hedge to mitigate exposure to interest rate fluctuations related to the Term Loan. For additional information, see Note 3, “Derivative Instruments.”

This excerpt taken from the LTD 10-Q filed Sep 5, 2008.

12. Long-term Debt

The following table provides the Company’s long-term debt balance as of August 2, 2008, February 2, 2008 and August 4, 2007:

 

     August 2,
2008
    February 2,
2008
    August 4,
2007
 
     (in millions)  

Term Loan due August 2012. Interest Rate of 3.43% as of August 2, 2008

   $ 750     $ 750     $ 750  

6.90% $700 million Notes due July 2017, Less Unamortized Discount

     698       698       698  

5.25% $500 million Notes due November 2014, Less Unamortized Discount

     499       499       499  

6.95% $350 million Debentures due March 2033, Less Unamortized Discount

     350       350       350  

7.60% $300 million Notes due July 2037, Less Unamortized Discount

     299       299       299  

6.125% $300 million Notes due December 2012, Less Unamortized Discount

     299       299       299  

Credit Facility due January 2010. Interest rate of 3.25% as of August 2, 2008

     12       15       19  

5.30% Mortgage due August 2010

     2       2       2  
                        

Total

     2,909       2,912       2,916  

Current Portion of Long-term Debt

     (8 )     (7 )     (8 )
                        

Total Long-term Debt, Net of Current Portion

   $ 2,901     $ 2,905     $ 2,908  
                        

In July 2007, the Company issued $700 million of 6.90% notes due July 15, 2017 and $300 million of 7.60% notes due July 15, 2037 utilizing a shelf registration statement under which up to $1 billion of debt securities, common and preferred stock and other securities could be issued. Interest on the notes is payable on January 15 and July 15 of each year.

On August 3, 2007, the Company amended the October 2004 $500 million Term Loan agreement to increase the borrowing capacity to $750 million and extend the term to August 2012. During the second quarter of 2007, the Company borrowed the additional $250 million under the Term Loan agreement.

On August 3, 2007, the Company amended its $1 billion unsecured revolving credit facility (the “5-Year Facility”) by extending its term to August 2012 and executed a $500 million, 364-day unsecured revolving credit facility (the “2007 364-Day Facility”), which terminated in July 2008. In July 2008, the Company replaced the 2007 364-Day Facility with a $300 million 364-day unsecured revolving credit facility (the “2008 364-Day Facility”). Both facilities support the Company’s commercial paper and letter of credit programs. As of August 2, 2008, there were no borrowings outstanding under any facility. Fees payable under the 5-Year Facility are based on the Company’s long-term credit ratings and are currently 0.125% of the committed amount per year. Fees payable under the 2008 364-Day Facility are based on the Company’s long-term credit ratings and are 0.25% of the committed amount.

No commercial paper was outstanding as of August 2, 2008, February 2, 2008 or August 4, 2007.

 

12


Table of Contents

The Facilities and the Term Loan have several interest rate options which are based in part on the Company’s long-term credit ratings. These agreements also require the Company to maintain certain specified fixed charge and debt-to-earnings ratios and prohibit certain types of liens on property or assets. The Company was in compliance with the covenant requirements as of August 2, 2008.

In January 2008, the Company entered into a participating interest rate swap arrangement designated as a cash flow hedge to mitigate exposure to interest rate fluctuations related to the Term Loan. For additional information, see Note 3, “Derivative Instruments.”

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