TJ Maxx 2006 Annual Report Download - page 76

The aggregate maturities of long-term debt, exclusive of current installments at January 27, 2007 are as follows:
In Thousands
Long
Term
Debt
Fiscal Year
2009 $-
2010 399,003
2011 -
2012 -
Later years 391,012
Deferred (loss) on settlement of interest rate swap and fair value adjustments on hedged debt, net (4,370)
Aggregate maturities of long-term debt, exclusive of current installments $785,645
The above maturity table assumes that all holders of the zero coupon convertible subordinated notes exercise
their put options in fiscal 2014. Any of the notes on which put options are not exercised, redeemed or converted will
mature in fiscal 2022.
In January 2006, we entered into a C$235.0 million term credit facility (through our Canadian division, Winners)
due in January, 2010. This debt is guaranteed by TJX. Interest is payable on borrowings under this facility at rates equal
to or less than Canadian prime rate. The variable rate on this note was 4.34% at January 27, 2007. The proceeds were
used to fund the repatriation of earnings from our Canadian division as well as other general corporate purposes of this
division.
In February 2001, TJX issued $517.5 million zero coupon convertible subordinated notes due in February 2021
and raised gross proceeds of $347.6 million. The issue price of the notes represented a yield to maturity of 2% per year.
Due to the first put option on February 13, 2002, we amortized the debt discount assuming a 1.5% yield for fiscal 2002.
The notes are subordinated to all existing and future senior indebtedness of TJX. The notes are convertible into
16.9 million shares of common stock of TJX if the sale price of our common stock reaches specified thresholds, if the
credit rating of the notes is below investment grade, if the notes are called for redemption or if certain specified
corporate transactions occur (see Note H). Each holder of the notes has the right to require us to purchase the notes on
February 13, 2013 at original purchase price plus accrued original issue discount for a total of $441.3 million for all
notes. We may pay the purchase price in cash, TJX stock or a combination of the two. If the holders exercise their put
options, we expect to fund the payment with cash, financing from our short-term credit facility, new long-term
borrowings or a combination thereof. There were two notes put to TJX on February 13, 2007 and three on February 13,
2004. In addition, if a change in control of TJX occurs on or before February 13, 2013, each holder may require TJX to
purchase for cash all or a portion of such holder’s notes. We may redeem for cash all, or a portion of, the notes at any time
on or after February 13, 2007 for the original purchase price plus accrued original issue discount.
The fair value of our general corporate debt, including current installments, is estimated by obtaining market
value quotes given the trading levels of other bonds of the same general issuer type and market perceived credit quality.
The fair value of our zero coupon convertible subordinated notes is estimated by obtaining market quotes. The fair
value of general corporate debt, including current installments, at January 27, 2007 is $405.7 million versus a carrying
value of $394.6 million. The fair value of the zero coupon convertible subordinated notes, as of January 27, 2007, is
$503.9 million versus a carrying value of $391.0 million. These estimates do not necessarily reflect certain provisions or
restrictions in the various debt agreements which might affect our ability to settle these obligations.
In fiscal 2007, we amended our $500 million four-year revolving credit facility and our $500 million five-year
revolving credit facility (initially entered into in fiscal 2006) to extend the maturity dates of these agreements until May
2010 and May 2011, respectively. These agreements have no compensating balance requirements and have various
covenants including a requirement of a specified ratio of debt to earnings. We also have a commercial paper program
pursuant to which we issue commercial paper from time to time. The revolving credit facilities are used as backup to our
commercial paper program. As of January 27, 2007 there were no outstanding amounts under our credit facilities. The
maximum amount of our U.S. short-term borrowings outstanding was $204.5 million during fiscal 2007, $566.5 million
during fiscal 2006 and $5.0 million during fiscal 2005. The weighted average interest rate on our U.S. short-term
borrowings was 5.35% in fiscal 2007, 3.69% in fiscal 2006 and 2.04% in fiscal 2005.
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