Annual report pursuant to Section 13 and 15(d)

Long-Term Debt

v3.3.1.900
Long-Term Debt
12 Months Ended
Jan. 30, 2016
Debt Disclosure [Abstract]  
Long-Term Debt
Long-Term Debt    
($ in millions)
 
2015
 
2014
Issue:
 
 
 
 
5.65% Senior Notes Due 2020(1) (2)
 
$
400

 
$
400

5.75% Senior Notes Due 2018(1) (3)
 
300

 
300

6.375% Senior Notes Due 2036(1) (4)
 
400

 
400

6.9% Notes Due 2026
 
2

 
2

7.125% Debentures Due 2023
 
10

 
10

7.4% Debentures Due 2037(5)
 
326

 
326

7.625% Notes Due 2097
 
500

 
500

7.65% Debentures Due 2016
 
78

 
78

7.95% Debentures Due 2017
 
220

 
220

8.125% Senior Notes Due 2019 (6)
 
400

 
400

2013 Term Loan Facility (7)
 
2,194

 
2,216

2014 Term Loan (8)
 

 
498

Total debt, excluding unamortized debt issuance costs, capital leases and note payable
 
4,830

 
5,350

Unamortized debt issuance costs
 
(61
)
 
(95
)
Total debt, excluding capital leases and note payable
 
4,769

 
5,255

Less: current maturities
 
101

 
28

Total long-term debt, excluding capital leases and note payable
 
$
4,668

 
$
5,227

Weighted-average interest rate at year end
 
6.5
%
 
6.4
%
Weighted-average maturity (in years)
 
13 years

 
 
 
(1)
These debt issuances contain a change of control provision that would obligate us, at the holders’ option, to repurchase the debt at a price of 101%. These provisions trigger if there were a beneficial ownership change of 50% or more of our common stock.
(2)
$4 million and $5 million of unamortized debt issue costs in 2015 and 2014, respectively.
(3)
$1 million and $1 million of unamortized debt issue costs in 2015 and 2014, respectively.
(4)
$6 million and $7 million of unamortized debt issue costs in 2015 and 2014, respectively.
(5)
$1 million and $1 million of unamortized debt issue costs in 2015 and 2014, respectively.
(6)
$8 million and $10 million of unamortized debt issue costs in 2015 and 2014, respectively.
(7)
$41 million and $58 million of unamortized debt issue costs in 2015 and 2014, respectively.
(8)
$13 million of unamortized debt issue costs in 2014.

2014 Debt Issuance and Tender Offers
In September 2014, we issued $400 million aggregate principal amount of 8.125% Senior Notes due 2019 and used the majority of the $393 million of proceeds from the offering, net of underwriting discounts, to pay the tender consideration and related transaction fees and expenses for our contemporaneous cash tender offers (2014 Tender Offers) to purchase approximately $327 million aggregate principal amount of the three outstanding series of debt securities described below (collectively, the Securities).
Title of Security
 
Principal Amount Outstanding Prior to 2014 Tender Offers ($ in millions)
 
Tender Premium(1)
 
Principal Amount Tendered ($ in millions)
 
Principal Amount Accepted for Purchase ($ in millions)
 
Principal Amount Outstanding After the 2014 Tender Offers ($ in millions)
6.875% Medium-Term Notes due 2015
 
$
200

 
$
67.50

 
$
140

 
$
140

 
$
60

7.65% Debentures due 2016
 
200

 
105.00

 
122

 
122

 
78

7.95% Debentures due 2017
 
285

 
97.50

 
194

 
65

 
220

Total
 
$
685

 
 
 
$
456

 
$
327

 
$
358

(1)
Per $1,000 principal amount of Securities.
We paid approximately $362 million aggregate consideration, including $6 million of accrued interest, for the accepted Securities in October 2014. The 2014 Tender Offers resulted in a loss on extinguishment of debt of $30 million which includes the premium paid over face value of the accepted Securities of $29 million and reacquisition costs of $1 million.
2014 Debt Defeasance
In October 2014, subsequent to the completion of the 2014 Tender Offers, we deposited approximately $64 million with Wilmington Trust, National Association, as Trustee under the Indenture with respect to our 6.875% Medium-Term Notes due 2015 (2015 Notes), to effect a legal defeasance of the remaining outstanding principal amount of 2015 Notes. As a result of depositing funds with the Trustee sufficient to make all payments of interest and principal on the outstanding 2015 Notes through October 15, 2015, the stated maturity of the 2015 Notes, the Company has satisfied and discharged all of its obligations under the terms of the 2015 Notes and with respect to the 2015 Notes under the Indenture. The defeasance resulted in a loss on extinguishment of debt of $4 million which represents the portion of the deposited funds for future interest payments on the 2015 Notes.
2013 Term Loan Facility
In 2013, JCP entered into a $2.25 billion five-year senior secured term loan facility (2013 Term Loan Facility). The 2013 Term Loan Facility is guaranteed by J. C. Penney Company, Inc. and certain subsidiaries of JCP, and is secured by mortgages on certain real estate of JCP and the guarantors, in addition to substantially all other assets of JCP and the guarantors. The 2013 Term Loan Facility bears interest at a rate of LIBOR plus 5.0%. We are required to make quarterly repayments in a principal amount equal to $5.625 million during the five-year term, subject to certain reductions for mandatory and optional prepayments.

Scheduled Annual Principal Payments on Long-Term Debt, Excluding Capital Leases and Note Payable
($ in millions)
 
2016
$
101

2017
243

2018
2,449

2019
400

2020
400

Thereafter
1,237

Total
$
4,830