Best Buy 2016 Annual Report Download - page 84

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unsecured revolving credit facility with a syndicate of banks, which was originally scheduled to expire in October 2016, but
was terminated on June 30, 2014.
The interest rate under the Five-Year Facility Agreement is variable and is determined at our option as: (i) the sum of (a) the
greatest of (1) JPMorgan's prime rate, (2) the federal funds rate plus 0.5%, and (3) the one-month London Interbank Offered
Rate (“LIBOR”) plus 1.0%, and (b) a variable margin rate (the “ABR Margin”); or (ii) the LIBOR plus a variable margin rate
(the “LIBOR Margin”). In addition, a facility fee is assessed on the commitment amount. The ABR Margin, LIBOR Margin
and the facility fee are based upon the registrant's current senior unsecured debt rating. Under the Five-Year Facility
Agreement, the ABR Margin ranges from 0.0% to 0.925%, the LIBOR Margin ranges from 1.000% to 1.925%, and the facility
fee ranges from 0.125% to 0.325%. At January 30, 2016, and January 31, 2015, there were no borrowings outstanding and at
January 30, 2016, $1.25 billion was available under the Five-Year Facility Agreement.
The Five-Year Facility Agreement is guaranteed by specified subsidiaries of Best Buy Co., Inc. and contains customary
affirmative and negative covenants. Among other things, these covenants restrict Best Buy Co., Inc. and certain of its
subsidiaries' ability to incur certain types or amounts of indebtedness, incur liens on certain assets, make material changes in
corporate structure or the nature of its business, dispose of material assets, engage in a change in control transaction, make
certain foreign investments, enter into certain restrictive agreements, or engage in certain transactions with affiliates. The Five-
Year Facility Agreement also contains financial covenants that require us to maintain a maximum cash flow leverage ratio and a
minimum interest coverage ratio (both ratios measured quarterly for the previous 12 months). The Five-Year Facility
Agreement contains default provisions including, but not limited to, failure to pay interest or principal when due and failure to
comply with covenants.
Long-Term Debt
Long-term debt consisted of the following ($ in millions):
January 30, 2016 January 31, 2015
2016 Notes $ 350 $ 350
2018 Notes 500 500
2021 Notes 650 650
Interest rate swap valuation adjustments 25 1
Other debt —1
Subtotal 1,525 1,502
Debt discounts and issuance costs (7)(10)
Financing lease obligations 178 69
Capital lease obligations 38 52
Total long-term debt 1,734 1,613
Less: current portion (395)(41)
Total long-term debt, less current portion $ 1,339 $ 1,572
2018 Notes
On July 16, 2013, we completed the sale of $500 million principal amount of notes due August 1, 2018 (the “2018 Notes”). The
2018 Notes bear interest at a fixed rate of 5.00% per year, payable semi-annually on February 1 and August 1 of each year,
beginning on February 1, 2014. Net proceeds from the sale of the 2018 Notes were $495 million, after underwriting and issue
discounts totaling $5 million.
We may redeem some or all of the 2018 Notes at any time, at a redemption price equal to the greater of (1) 100% of the
principal amount of the 2018 Notes to be redeemed and (2) the sum of the present values of each remaining scheduled payment
of principal and interest on the 2018 Notes to be redeemed discounted to the redemption date on a semi-annual basis at the
Treasury Rate plus 50 basis points. Furthermore, if a change of control triggering event occurs, we will be required to offer to
purchase the remaining unredeemed 2018 Notes at a price equal to 101% of their principal amount, plus accrued and unpaid
interest to the purchase date.