Quarterly report pursuant to Section 13 or 15(d)

DEBT

v3.19.1
DEBT
3 Months Ended
May 04, 2019
DEBT  
DEBT

5. DEBT

 

Long-term debt consists of the following (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

May 4,

 

February 2,

 

May 5,

 

Interest Rate

 

2019

 

2019

 

2018

Term loan credit facility

Variable

 

$

2,201,225

 

$

2,207,450

 

$

2,226,125

Senior subordinated notes

5.875

%

 

510,000

 

 

510,000

 

 

510,000

Total debt

 

 

 

2,711,225

 

 

2,717,450

 

 

2,736,125

Less unamortized discount/premium and debt costs

 

 

 

(10,723)

 

 

(11,550)

 

 

(14,817)

Total debt, net

 

 

 

2,700,502

 

 

2,705,900

 

 

2,721,308

Less current portion

 

 

 

(24,900)

 

 

(24,900)

 

 

(24,900)

Long-term debt

 

 

$

2,675,602

 

$

2,681,000

 

$

2,696,408

 

Revolving Credit Facility

 

As of May 4, 2019 and May 5, 2018, the borrowing base under our senior secured asset-based revolving credit facility was $784.3 million and $770.7 million, respectively, of which Michaels Stores, Inc. (“MSI”) had unused borrowing capacity of $677.1 million and $674.0 million, respectively. As of May 4, 2019 and May 5, 2018, outstanding standby letters of credit, which reduce our borrowing base, totaled $107.2 million and $96.7 million, respectively.

 

Interest Rate Swaps

 

In April 2018, we executed two interest rate swaps with an aggregate notional value of $1.0 billion associated with our outstanding Amended and Restated Term Loan Credit Facility. The interest rate swaps have a maturity date of April 30, 2021 and were executed for risk management and are not held for trading purposes. The objective of the interest rate swaps is to hedge the variability of cash flows resulting from fluctuations in the one-month LIBOR. The swaps replaced the one-month LIBOR with a fixed interest rate of 2.7765% and payments are settled monthly. The swaps qualify as cash flow hedges and changes in the fair values are recorded in accumulated other comprehensive income in the consolidated balance sheet. The changes in fair value are reclassified from accumulated other comprehensive income to interest expense in the same period that the hedged items affect earnings. Amounts reclassified from accumulated other comprehensive income to interest expense during the first quarters of fiscal 2019 and fiscal 2018 were not material.