Annual report pursuant to Section 13 and 15(d)

Financing

v3.23.1
Financing
 12 Months Ended
Jan. 28, 2023
Debt Disclosure [Abstract]  
Financing Financing
The Company’s debt is as follows:
January 28,
2023		 January 29,
2022
(millions)
Long-term debt:    
5.875% Senior notes due 2029
 $ 500  $ 500 
5.875% Senior notes due 2030
 425  — 
6.125% Senior notes due 2032
 425  — 
4.5% Senior notes due 2034
 367  367 
5.125% Senior notes due 2042
 250  250 
4.3% Senior notes due 2043
 250  250 
6.375% Senior notes due 2037
 192  192 
6.7% Senior exchanged debentures due 2034
 181  183 
7.0% Senior debentures due 2028
 105  105 
6.9% Senior debentures due 2029
 79  79 
6.7% Senior exchanged debentures due 2028
 73  74 
6.79% Senior debentures due 2027
 71  71 
6.7% Senior debentures due 2028
 29  29 
6.7% Senior debentures due 2034
 18  18 
8.75% Senior exchanged debentures due 2029
 13  13 
6.9% Senior debentures due 2032
 12  12 
7.6% Senior debentures due 2025
 6  6 
7.875% Senior exchanged debentures due 2030
 5  5 
7.875% Senior debentures due 2030
 5  5 
6.9% Senior exchanged debentures due 2032
 1  5 
2.875% Senior notes due 2023
 —  504
3.625% Senior notes due 2024
 —  350
4.375% Senior notes due 2023
 —  161
6.65% Senior exchanged debentures due 2024
 —  81
6.65% Senior debentures due 2024
 —  36
Unamortized debt issue costs and discount (28) (22)
Premium on acquired debt, using an effective interest yield of 5.76% to 6.021%
 17 21
$ 2,996  $ 3,295 
Interest expense and losses on early retirement of debt are as follows:
2022 2021 2020
(millions)
Interest on debt $ 185  $ 246  $ 273 
Amortization of debt premium (2) (3) (4)
Amortization of financing costs and debt discount 13  26  23 
Interest on finance leases 1  1  1 
197  270  293 
Less interest capitalized on construction 22  14  9 
Interest expense $ 175  $ 256  $ 284 
Losses on early retirement of debt $ 31  $ 199  $ — 
2022 Financing Activities
ABL Credit Facility
On March 3, 2022, the Company entered into a third amendment to the ABL Credit Facility which provides for a new Revolving Credit Facility of $3.0 billion (the New ABL Credit Facility). Amounts borrowed under the New ABL Credit Facility are subject to interest at a rate per annum equal to, at the ABL Borrower’s option, either (i) adjusted SOFR (calculated to include a 0.10% credit adjustment spread) plus a margin of 1.25% to 1.50% or (ii) a base rate plus a margin of 0.25% to 0.50%, in each case depending on revolving line utilization. The New ABL Credit Facility matures in March 2027. As of January 28, 2023 and January 29, 2022, there were no borrowings under the agreement and there were $65 million and $116 million, respectively, of other standby letters of credit outstanding.
Senior Secured and Unsecured Notes
On March 8, 2022, the Company completed a tender offer in which $8 million of certain senior secured notes were tendered for early settlement and the collateral that secured the remaining $352 million of the Company’s senior secured notes was automatically released.
On March 10, 2022, the Company issued $425 million of 5.875% senior notes due 2030 (the 2030 Notes) and $425 million of 6.125% senior notes due 2032 (the 2032 Notes) in a private offering. Proceeds from the issuance, together with cash on hand, were used to redeem $1.1 billion of certain of its outstanding senior notes and pay fees and expenses in connection with the offering. The Company recognized $31 million of losses related to the early retirement of debt on the Consolidated Statement of Income. Each of the 2030 Notes and 2032 Notes are senior unsecured obligations of MRH and are unconditionally guaranteed on an unsecured basis by Macy’s, Inc.
2021 Financing Activities
Senior Secured and Unsecured Notes
On March 17, 2021, the Company completed a tender offer in which $500 million of senior notes and debentures were tendered for early settlement and purchased by MRH. The total cash cost for the tender offer was $17 million with the remainder funded through the net proceeds from the Notes Offering discussed below. The Company recognized $11 million of losses on early retirement of debt on the Consolidated Statement of Income during 2021.
On March 17, 2021, the Company issued $500 million of 5.875% senior notes due 2029 in a private offering, which are senior unsecured obligations of MRH and are unconditionally guaranteed on a senior unsecured basis by Macy’s, Inc. MRH used the net proceeds from the Notes Offering, together with cash on hand, to fund the tender offer discussed above.
On August 17, 2021, the Company redeemed the entire outstanding $1.3 billion amount of its 8.375% senior secured notes due 2025. The redemption price was equal to 100% of the outstanding principal amount of the notes ($1.3 billion), plus accrued and unpaid interest of $19 million, plus the applicable premium due to holders in connection with the early redemption of $138 million, plus unamortized deferred debt costs of $47 million. The Company recognized the redemption premium and unamortized deferred debt costs of $185 million as losses on early retirement of debt on the Consolidated Statement of Income during 2021.
On October 15, 2021, the Company redeemed the entire outstanding $294 million amount of its 3.875% senior notes due 2022. The redemption price was equal to 100% of the outstanding principal amount of $294 million, plus accrued and unpaid interest of $3 million.
Other Debt Obligations
Bank Credit Agreement
On June 8, 2020, the Company amended its existing credit agreement, which reduced the credit commitments of its existing $1,500 million unsecured credit agreement. The new agreement provided for revolving credit borrowings and letters of credit in an aggregate amount not to exceed $1 million. The new credit agreement is scheduled to expire on May 9, 2024, subject to up to two one-year extensions that could be requested by the Company and agreed to by the lenders. The unsecured revolving credit facility contains covenants that provide for, among other things, limitations on fundamental changes, use of proceeds, and maintenance of property, as well as customary representations and warranties and events of default. As of January 28, 2023 and January 29, 2022, there were no revolving credit loans outstanding under the credit agreement.
Senior Notes and Debentures
The senior notes and the senior debentures are unsecured obligations of a 100%-owned subsidiary of Macy’s, Inc. and Macy's Inc. has fully and unconditionally guaranteed these obligations.
Other Financing Arrangements
There were $65 million and $116 million, respectively, of other standby letters of credit outstanding at January 28, 2023 and January 29, 2022.
Long-Term Debt Maturities
Future maturities of long-term debt are shown below:
(millions)
Fiscal year
2024 $ — 
2025 6 
2026 — 
2027 71 
2028 207 
After 2028 2,723 
Debt Repayments
The following table shows the detail of debt repayments:
2022 2021 2020
(millions)
Revolving credit facility $ 1,959  $ 585  $ 1,500 
2.875% Senior notes due 2023
 504  136  — 
3.625% Senior notes due 2024
 350  150  — 
4.375% Senior notes due 2023
 161  49  — 
6.65% Senior debentures due 2024
 81  5  — 
6.65% Debentures due 2024
 36  —  — 
6.9% Senior debentures due 2032
 4  —  — 
6.7% Senior debentures due 2034
 2  —  — 
6.7% Senior debentures due 2028
 1  —  — 
8.375% Senior secured notes due 2025
 —  1,300  — 
3.875% Senior notes due 2022
 —  450  — 
7.6% Senior debentures due 2025
 —  18  — 
3.45% Senior notes due 2021
 —  —  500 
10.25% Senior debentures due 2021
 —  —  33 
9.5% amortizing debentures due 2021
 —  2  4 
9.75% amortizing debentures due 2021
 —  1  2 
$ 3,098  $ 2,696  $ 2,039