Macy's 2013 Annual Report Download - page 67

Table of Contents
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A breach of a restrictive covenant in the Company’s credit agreement or the inability of the Company to maintain the financial ratios described above
could result in an event of default under the credit agreement. In addition, an event of default would occur under the credit agreement if any indebtedness of the
Company in excess of an aggregate principal amount of $150 million becomes due prior to its stated maturity or the holders of such indebtedness become able
to cause it to become due prior to its stated maturity. Upon the occurrence of an event of default, the lenders could, subject to the terms and conditions of the
credit agreement, elect to declare the outstanding principal, together with accrued interest, to be immediately due and payable. Moreover, most of the
Company’s senior notes and debentures contain cross-default provisions based on the non-payment at maturity, or other default after an applicable grace
period, of any other debt, the unpaid principal amount of which is not less than $100 million that could be triggered by an event of default under the credit
agreement. In such an event, the Company’s senior notes and debentures that contain cross-default provisions would also be subject to acceleration.
Commercial Paper
The Company is a party to a $1,500 million unsecured commercial paper program. The Company may issue and sell commercial paper in an aggregate
amount outstanding at any particular time not to exceed its then-current combined borrowing availability under the bank credit agreement described above. The
issuance of commercial paper will have the effect, while such commercial paper is outstanding, of reducing the Company’s borrowing capacity under the
bank credit agreement by an amount equal to the principal amount of such commercial paper. The Company had no commercial paper outstanding under its
commercial paper program throughout all of 2013 and 2012.
This program, which is an obligation of a 100%-owned subsidiary of Macy’s, Inc., is not secured. However, Parent has fully and unconditionally
guaranteed the obligations.
Senior Notes and Debentures
The senior notes and the senior debentures are unsecured obligations of a 100%-owned subsidiary of Macy’s, Inc. and Parent has fully and
unconditionally guaranteed these obligations (see Note 16, “Condensed Consolidating Financial Information”).
Other Financing Arrangements
At February 1, 2014 and February 2, 2013, the Company had dedicated $37 million of cash, included in prepaid expenses and other current assets,
which is used to collateralize the Company’s issuances of standby letters of credit. There were $34 million of other standby letters of credit outstanding at
February 1, 2014 and February 2, 2013.
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