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SEARS HOLDINGS CORPORATION
Notes to Consolidated Financial Statements—(Continued)
(3) The Senior Secured Term Loan is collateralized by a priority interest in all non-real estate assets of OSH
and a second lien on OSH’s inventory, and requires quarterly repayments equal to 0.25% of the then
outstanding principal balance. The Senior Secured Term Loan had an interest rate of LIBOR plus 4.75% at
January 29, 2011.
The fair value of long-term debt was $2.5 billion at January 29, 2011 and $1.4 billion at January 30, 2010.
The fair value of our debt was estimated based on quoted market prices for the same or similar issues or on
current rates offered to us for debt of the same remaining maturities.
At January 29, 2011, long-term debt maturities for the next five years and thereafter were as follows:
millions
2011 .............................................................. $ 509
2012 .............................................................. 235
2013 .............................................................. 329
2014 .............................................................. 58
2015 .............................................................. 160
Thereafter .......................................................... 1,881
$3,172
Interest
Interest expense for years 2010, 2009, and 2008 was as follows:
millions 2010 2009 2008
COMPONENTS OF INTEREST EXPENSE
Interest expense ................................................. $258 $219 $243
Accretion of lease obligations at net present value ...................... 21 22 24
Amortization of debt issuance costs ................................. 31 24 5
Interest expense ................................................. $310 $265 $272
Debt Repurchase Authorization
In 2005, our Finance Committee of the Board of Directors authorized the repurchase, subject to market
conditions and other factors, of up to $500 million of our outstanding indebtedness in open market or privately
negotiated transactions. Our wholly owned finance subsidiary, Sears Roebuck Acceptance Corp. (“SRAC”), has
repurchased $215 million of its outstanding notes, including $6 million repurchased during 2009 and $49 million
repurchased during 2008, thereby reducing the unused balance of this authorization to $285 million. We
recognized a gain of $13 million on the repurchases made during 2008.
Unsecured Commercial Paper
We borrow through the commercial paper markets. At January 29, 2011 and January 30, 2010, we had
outstanding commercial paper borrowings of $360 million and $206 million, respectively. ESL Investments, Inc.
held $240 million at January 29, 2011. See Note 16 for further discussion of these borrowings.
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