Kroger 2015 Annual Report Download - page 124

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A-50
6. DEBT OBLIGATIONS
Long-term debt consists of:
2015 2014
0.76% to 8.00% Senior notes due through 2043 $ 9,826 $ 9,224
5.00% to 12.75% Mortgages due in varying amounts through 2027 58 73
0.27% to 0.66% Commercial paper due through February 2016 990 1,275
Other 522 454
Total debt 11,396 11,026
Less current portion (2,318) (1,844)
Total long-term debt $ 9,078 $ 9,182
In 2015, the Company issued $500 of senior notes due in fiscal year 2026 bearing an interest rate of
3.50%, $300 of senior notes due in fiscal year 2021 bearing an interest rate of 2.60% and $300 of senior
notes due in fiscal year 2019 bearing an interest rate of 2.00%, and repaid $500 of senior notes bearing
an interest rate of 3.90% upon maturity. Due to the merger with Roundy’s, the Company assumed $678
of term loans, which were entirely paid off following the merger.
In 2014, the Company issued $500 of senior notes due in fiscal year 2021 bearing an interest rate of
2.95% and repaid $300 of senior notes bearing an interest rate of 4.95% upon maturity.
On June 30, 2014, the Company amended, extended and restated its $2,000 unsecured revolving
credit facility. The Company entered into the amended credit facility to amend, extend and restate
the Company’s existing credit facility that would have terminated on January 25, 2017. The amended
credit facility provides for a $2,750 unsecured revolving credit facility (the “Credit Agreement”), with
a termination date of June 30, 2019, unless extended as permitted under the Credit Agreement. The
Company has the ability to increase the size of the Credit Agreement by up to an additional $750, subject
to certain conditions.
Borrowings under the Credit Agreement bear interest at the Company’s option, at either (i) LIBOR
plus a market rate spread, based on the Company’s Leverage Ratio or (ii) the base rate, defined as the
highest of (a) the Federal Funds Rate plus 0.5%, (b) the Bank of America prime rate, and (c) one-month
LIBOR plus 1.0%, plus a market rate spread based on the Company’s Leverage Ratio. The Company
will also pay a Commitment Fee based on the Leverage Ratio and Letter of Credit fees equal to a market
rate spread based on the Company’s Leverage Ratio. The Credit Agreement contains covenants, which,
among other things, require the maintenance of a Leverage Ratio of not greater than 3.50:1.00 and a
Fixed Charge Coverage Ratio of not less than 1.70:1.00. The Company may repay the Credit Agreement
in whole or in part at any time without premium or penalty. The Credit Agreement is not guaranteed by
the Company’s subsidiaries.
As of January 30, 2016, the Company had $990 of borrowings of commercial paper, with a weighted
average interest rate of 0.66%, and no borrowings under its Credit Agreement. As of January 31, 2015,
the Company had $1,275 of borrowings of commercial paper, with a weighted average interest rate of
0.37%, and no borrowings under its Credit Agreement.
As of January 30, 2016, the Company had outstanding letters of credit in the amount of $244, of
which $13 reduces funds available under the Company’s Credit Agreement. The letters of credit are
maintained primarily to support performance, payment, deposit or surety obligations of the Company.