Obligation Kohls 9.5% ( US500255AW45 ) en USD

Kohls

104.03 % ▼

Etas-Unis

US500255AW45 ( en USD )

9.5% par an ( paiement semestriel )

15/05/2025

Prospectus brochure de l'obligation Kohls US500255AW45 en USD 9.5%, échéance 15/05/2025

2 000 USD

600 000 000 USD

500255AW4

BBB- ( Qualité moyenne inférieure )

Baa2 ( Qualité moyenne inférieure )

15/11/2024 ( Dans 183 jours )

L'Obligation émise par Kohls ( Etas-Unis ) , en USD, avec le code ISIN US500255AW45, paye un coupon de 9.5% par an.
Le paiement des coupons est semestriel et la maturité de l'Obligation est le 15/05/2025

L'Obligation émise par Kohls ( Etas-Unis ) , en USD, avec le code ISIN US500255AW45, a été notée Baa2 ( Qualité moyenne inférieure ) par l'agence de notation Moody's.

L'Obligation émise par Kohls ( Etas-Unis ) , en USD, avec le code ISIN US500255AW45, a été notée BBB- ( Qualité moyenne inférieure ) par l'agence de notation Standard & Poor's ( S&P ).

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Table of Contents
Filed Pursuant to Rule 424(b)(5)
Registration No. 333-225182
CALCULATION OF REGISTRATION FEE

Amount
Maximum
Maximum
Title of each class of
to be
offering price
aggregate
Amount of
securities to be registered

registered

per unit

offering price

registration fee(1)
9.500% Notes due 2025

$600,000,000

99.990%

$599,940,000

$77,872.21

(1)
Calculated in accordance with Rule 457(r) under the Securities Act of 1933, as amended.
Table of Contents
PROSPECTUS SUPPLEMENT
(To Prospectus dated May 24, 2018)
$600,000,000

Kohl's Corporation
9.500% NOTES DUE 2025

Kohl's Corporation will pay interest on the $600,000,000 9.500% notes due 2025 (the "notes") on May 15 and November 15 of each year, beginning
November 15, 2020. The interest rate payable on the notes will be subject to adjustment based on certain rating events. See "Description of the Notes--
Interest Rate Adjustment of the Notes Based on Certain Rating Events." The notes will mature on May 15, 2025. We may redeem the notes in whole or in
part at the redemption prices set forth under "Description of the Notes--Optional Redemption." If we experience a change of control repurchase event with
respect to the notes, we may be required to offer to repurchase the notes from holders as described under "Description of the Notes--Repurchase upon
Change of Control Repurchase Event."
The notes will be our senior unsecured obligations and will rank equally in right of payment with all of our other senior unsecured indebtedness from
time to time outstanding. The notes will be effectively subordinated to all of our existing and future secured indebtedness or other secured liabilities to the
extent of the value of the assets securing such indebtedness and liabilities and to all indebtedness and other liabilities of our subsidiaries. The notes will be
issued only in registered form in denominations of $2,000 and integral multiples of $1,000 above that amount.

Investing in the notes involves risks that are described under "Risk Factors" beginning on page S-9.

Per Note

Total

Public offering price (1)

99.990%
$599,940,000
Underwriting discount

1.000%
$
6,000,000
Proceeds, before expenses, to us (1)

98.990%
$593,940,000

(1)
Plus accrued interest, if any, from April 29, 2020, if settlement occurs after that date.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the notes or passed
upon the adequacy or accuracy of this prospectus supplement or the accompanying prospectus. Any representation to the contrary is a criminal
offense.
The notes will be ready for delivery in book-entry form only through The Depository Trust Company for the accounts of its participants, including
Clearstream Banking S.A. and Euroclear Bank SA/NV, on or about April 29, 2020.
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Joint Book-Running Managers

Goldman Sachs & Co. LLC

Morgan Stanley

Wells Fargo Securities
Senior Co-Managers

BofA Securities

J.P. Morgan

US Bancorp
MUFG
BMO Capital Markets

TD Securities
Co-Managers

Capital One Securities

Fifth Third Securities

HSBC
BNY Mellon Capital Markets, LLC
PNC Capital Markets LLC
Comerica Securities
Siebert Williams Shank
April 27, 2020
Table of Contents
You should rely only on the information contained or incorporated by reference in this prospectus supplement, the accompanying
prospectus and any free writing prospectus we have authorized. We have not authorized anyone to provide you with different information. We are
not making an offer of these securities in any jurisdiction where the offer is not permitted. You should not assume that the information contained
or incorporated by reference in this prospectus supplement, the accompanying prospectus or any free writing prospectus is accurate as of any date
after the dates on the front of this prospectus supplement, the accompanying prospectus or any free writing prospectus, as applicable, or for
information incorporated by reference, as of the dates of that information.

TABLE OF CONTENTS
Prospectus Supplement

Page
About This Prospectus Supplement
S-1
Cautionary Statements Relating to Forward-Looking Information
S-1
Prospectus Supplement Summary
S-3
Risk Factors
S-9
Use of Proceeds
S-14
Capitalization
S-15
Description of the Notes
S-16
Material United States Federal Income Tax Consequences
S-27
Underwriting (Conflicts of Interest)
S-33
Legal Matters
S-38
Experts
S-38
Prospectus

Page
About This Prospectus

1
Where You Can Find More Information About Kohl's

1
Cautionary Statements Relating to Forward-Looking Information

2
The Company

2
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Use of Proceeds

2
Ratios of Earnings to Fixed Charges

3
The Securities We May Offer

3
Description of Debt Securities

3
Description of Capital Stock

12
Description of Depositary Shares

15
Description of Warrants

18
Book-Entry Securities

21
Plan of Distribution

23
Legal Matters

25
Experts

25
Table of Contents
ABOUT THIS PROSPECTUS SUPPLEMENT
This document is in two parts. The first part is this prospectus supplement, which contains the terms of this offering of notes. The second part is the
prospectus dated May 24, 2018 which is part of our Registration Statement on Form S-3.
This prospectus supplement may add to, update or change the information in the accompanying prospectus. If information in this prospectus
supplement is inconsistent with information in the accompanying prospectus, this prospectus supplement will apply and will supersede that information in
the accompanying prospectus.
It is important for you to read and consider all information contained or incorporated by reference in this prospectus supplement, the accompanying
prospectus and any free writing prospectus we have authorized in making your investment decision. See "Where You Can Find More Information About
Kohl's" in the accompanying prospectus.
No person is authorized to give any information or to make any representations other than those contained or incorporated by reference in this
prospectus supplement, the accompanying prospectus or in any free writing prospectus we have authorized and, if given or made, such information or
representations must not be relied upon as having been authorized. This prospectus supplement, the accompanying prospectus and any free writing
prospectus we have authorized do not constitute an offer to sell or the solicitation of an offer to buy any securities other than the securities described in this
prospectus supplement or an offer to sell or the solicitation of an offer to buy such securities in any circumstances in which such offer or solicitation is
unlawful. Neither the delivery of this prospectus supplement, the accompanying prospectus or any free writing prospectus we have authorized, nor any sale
made hereunder, shall under any circumstances create any implication that there has been no change in our affairs since the date of this prospectus
supplement, or that the information contained or incorporated by reference in this prospectus supplement, the accompanying prospectus or any free writing
prospectus we have authorized is correct as of any time subsequent to the date of such information.
The distribution of this prospectus supplement, the accompanying prospectus and any free writing prospectus we may authorize and the offering of
the notes in certain jurisdictions may be restricted by law. This prospectus supplement, the accompanying prospectus and any free writing prospectus we
may authorize do not constitute an offer, or an invitation on our behalf or the underwriters or any of them, to subscribe for or purchase any of the notes, and
may not be used for or in connection with an offer or solicitation by anyone, in any jurisdiction in which such an offer or solicitation is not authorized or to
any person to whom it is unlawful to make such an offer or solicitation. See "Underwriting (Conflicts of Interest)."
In this prospectus supplement and the accompanying prospectus, unless otherwise stated, references to "Kohl's," "we," "us" and "our" refer to Kohl's
Corporation and its subsidiaries. Our fiscal year ends on the Saturday closest to January 31st. Unless otherwise stated, references to years in this prospectus
supplement and the accompanying prospectus relate to fiscal years rather than to calendar years.
Cautionary Statements Relating to Forward-Looking Information
This prospectus supplement and the accompanying prospectus, and the documents incorporated herein and therein by reference, may contain
"forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. Additionally, we or our representatives may, from time to time, make other written or verbal forward-looking statements. Those
statements relate to developments, results, conditions or other events we expect or anticipate will occur in the future. Words such as "believes,"
"anticipates," "may," "should," "could," "plans," "expects" and similar expressions identify forward-looking statements. Those statements may relate to
future revenues, earnings, store openings, market conditions, new strategies and the competitive environment, including

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Table of Contents
statements related to the ongoing implications of the novel coronavirus ("COVID-19"). Forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from those indicated by the forward-looking statements. These risks and uncertainties
include, but are not limited to those described in Item 1A of our annual report on Form 10-K for the fiscal year ended February 1, 2020, which is
incorporated into this prospectus supplement and the accompanying prospectus by reference, and other factors as may periodically be described in our
filings with the Securities and Exchange Commission (the "SEC").
Any number of risks and uncertainties could cause actual results to differ materially from those we express in our forward-looking statements,
including our ability to successfully navigate the impact of COVID-19; the short and long-term impact of COVID-19 on the economy, and retail and
economic activity; changes in consumer behavior and confidence, including those changes related to rising unemployment rates; the duration and scope of
COVID-19, and the pace of recovery thereafter; the actions that governments, businesses and individuals take in response to COVID-19, including store
closures and limiting or prohibiting certain retail activities; general economic uncertainty and a worsening of economic conditions or low levels of
economic growth; the effects of steps we take to reduce operating costs and increase our cash position; competitive conditions in the retail industry;
relationships with our associates, customers, vendors, lenders, and stockholders; and the availability of capital to operate our business. Forward-looking
statements speak as of the date they are made, and we undertake no obligation to update them except as required by law.

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Table of Contents
Prospectus Supplement Summary
This summary highlights selected information about us and this offering. It may not contain all of the information that is important to you in
deciding whether to purchase notes. We encourage you to read the entire prospectus supplement, the accompanying prospectus, any free writing
prospectus we have authorized and the documents that we have filed with the SEC that are incorporated by reference prior to deciding whether to
purchase notes.
Kohl's Corporation
As of February 1, 2020, we operated 1,159 Kohl's stores, a website (www.Kohls.com), and 12 FILA outlets. Our Kohl's stores and website sell
moderately-priced private and national brand apparel, footwear, accessories, beauty, and home products. Our Kohl's stores generally carry a
consistent merchandise assortment with some differences attributable to local preferences. Our website includes merchandise that is available in our
stores, as well as merchandise that is available only online.
Our merchandise mix includes both national brands and private brands that are available only at Kohl's. Our private portfolio includes well-
known established brands such as Apt. 9, Croft & Barrow, Jumping Beans, SO, and Sonoma Goods for Life, and exclusive brands that are developed
and marketed through agreements with nationally-recognized brands such as Food Network, LC Lauren Conrad, and Simply Vera Vera Wang.
Compared to private brands, national brands generally have higher selling prices, but lower gross margins.
Distribution
We receive substantially all of our store merchandise at our nine retail distribution centers. A small amount of our merchandise is delivered
directly to the stores by vendors or their distributors. The retail distribution centers, which are strategically located throughout the United States, ship
merchandise to each store by contract carrier several times a week. Digital sales may be picked up in our stores or are shipped from a Kohl's
fulfillment center, retail distribution center or store, either by a third-party fulfillment center or directly by a third-party vendor.
Corporate Information
Kohl's was organized in 1988 as a Wisconsin corporation. Kohl's principal executive offices are located at N56 W17000 Ridgewood Drive,
Menomonee Falls, Wisconsin 53051, and our telephone number is (262) 703-7000. Our website is www.Kohls.com. The information on our website
is not part of this prospectus supplement.
Recent Developments
The impact of and actions taken in response to COVID-19 have had a significant impact on the retail industry generally and our business,
starting in the first quarter of fiscal year 2020. While all of our stores are temporarily closed in response to COVID-19, we continue to generate sales
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including by serving customers through our digital platform, and fulfilling orders from ship from store and Store Drive Up services.
On March 30, 2020, we announced that we would be taking several steps in an abundance of caution to proactively strengthen our financial
flexibility and navigate through this unprecedented situation. Specifically, we furloughed store and store distribution center associates as well as some
corporate office associates, announced Michelle Gass, our CEO, will not take a salary through the crisis, announced plans to decrease capital
expenditures by approximately $500 million, and are significantly reducing expenses related to marketing, technology and operations while stores
remain closed. We also announced that we are managing inventory meaningfully lower to align with anticipated sales. We also temporarily suspended
share repurchases and

S-3
Table of Contents
suspended our regular quarterly cash dividend beginning in the second quarter of fiscal 2020. Additionally, in April 2020, we replaced our previous
$1 billion unsecured revolving credit agreement with a new senior secured, asset based revolving credit facility providing for $1.5 billion in available
credit, which has been fully drawn to improve our liquidity position.
We do not know when we will be able to re-open stores. Accordingly, we cannot presently estimate the financial impact of COVID-19 and
have previously withdrawn our guidance provided as to the first quarter and full year 2020. However, we do expect the impact to continue to have a
material adverse effect on our business, financial condition, and results of operations for the full year 2020.

S-4
Table of Contents
The Offering

Issuer
Kohl's Corporation

Securities Offered
$600,000,000 9.500% Notes due 2025.

Maturity
The notes will mature on May 15, 2025.

Interest
Interest on the notes will accrue from April 29, 2020. Interest on the notes will be payable at
the rate set forth on the cover page of this prospectus supplement, subject to adjustment as
described in "Description of the Notes--Interest Rate Adjustment of the Notes Based on
Certain Rating Events."

Interest Payment Dates
Interest on the notes will be payable semi-annually in arrears on May 15 and November 15 of
each year, beginning November 15, 2020.

Interest Rate Adjustment
The interest rate payable on the notes will be subject to adjustment based on certain rating
events. See "Description of the Notes--Interest Rate Adjustment of the Notes Based on
Certain Rating Events."

Optional Redemption
We may redeem the notes at our option, in whole at any time or in part from time to time
prior to April 15, 2025 (one month prior to the maturity date of the notes) (the "Par Call
Date"), at a redemption price equal to the greater of:

· 100% of the principal amount of the notes being redeemed; and

· the sum of the present values of the remaining scheduled payments of principal and
interest thereon that would be due if such notes matured on the Par Call Date (not
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including any portion of such payments of interest accrued as of the date of

redemption), discounted to the date of redemption on a semi-annual basis (assuming
a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined
in "Description of the Notes--Optional Redemption"), plus 50 basis points,

plus accrued and unpaid interest on the notes to the redemption date.

In addition, we may redeem the notes at our option, in whole or in part at any time on or
after April 15, 2025 (one month prior to the maturity date of the notes), at a redemption price

equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid
interest on the notes to the redemption date.

Repurchase at the Option of Holders Upon a Change of If we experience a "Change of Control Repurchase Event" (as defined in "Description of the
Control Repurchase Event
Notes--Repurchase upon Change of Control Repurchase Event") with respect to the notes,
we will be required, unless we have exercised our right to redeem such notes, to offer to

S-5
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repurchase the notes at a repurchase price equal to 101% of their principal amount, plus

accrued and unpaid interest to the repurchase date.

Ranking
The notes will be our senior unsecured obligations and will rank equally in right of payment
to our other senior unsecured debt from time to time outstanding. The notes will be
effectively subordinated to all of our existing and future secured indebtedness or other
secured liabilities to the extent of the value of the assets securing such indebtedness and
liabilities and to all indebtedness and other liabilities of our subsidiaries. As of February 1,
2020, we had $1,856 million in principal amount of long-term indebtedness outstanding on a
consolidated basis, none of which was subsidiary indebtedness. On April 16, 2020, we
incurred an additional $1,500 million in senior secured long-term indebtedness under our
senior secured, asset based revolving credit facility, which was subsidiary indebtedness that
would be structurally senior to the notes.

Use of Proceeds
We primarily intend to use the net proceeds from this offering to repay $500 million of the
borrowings under our senior secured, asset based revolving credit facility with the remainder
for general corporate purposes. See "Use of Proceeds."

Conflict of Interest
We primarily intend to use the net proceeds from this offering to repay $500 million of the
borrowings under our senior secured, asset based revolving credit facility, as set forth above
in "Use of Proceeds." Accordingly, affiliates of certain underwriters may receive at least 5%
of the net offering proceeds in connection with any such repayment. Accordingly, this
offering is made in compliance with the requirements of Rule 5121 of Financial Industry
Regulatory Authority Inc. ("FINRA"). See "Underwriting (Conflicts of Interest)--Conflicts
of Interest."

Further Issues
We may from time to time, without notice to or the consent of the holders of the notes
offered hereby, create and issue additional debt securities having the same terms (except for
the issue date and, in some cases, the public offering price and the first interest payment date)
and ranking equally and ratably with the notes in all respects, as described under
"Description of the Notes--General."

Denomination and Form
We will issue the notes in the form of one or more fully registered global notes registered in
the name of the nominee of The Depository Trust Company, or DTC. Beneficial interests in
the notes will be represented through book-entry accounts of financial institutions acting on
behalf of beneficial owners as direct and indirect participants in DTC. Clearstream Banking
S.A. ("Clearstream") and Euroclear Bank SA/NV ("Euroclear"), will hold interests on behalf
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of their participants through their respective U.S. depositaries, which in turn will hold such
interests in accounts as participants of DTC. Except in the limited circumstances described in
this prospectus supplement, owners of beneficial interests in the notes will not be

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entitled to have notes registered in their names, will not receive or be entitled to receive
notes in definitive form and will not be considered holders of notes under the indenture. The

notes will be issued only in denominations of $2,000 and integral multiples of $1,000 in
excess thereof.

Risk Factors
Investing in the notes involves risks. See "Risk Factors" for a description of certain risks you
should particularly consider before investing in the notes.

Trustee
The Bank of New York Mellon Trust Company, N.A., formerly known as The Bank of New
York Trust Company, N.A., as successor to The Bank of New York.

Governing Law
New York.

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Table of Contents
Summary Financial Information
The following table sets forth our summary consolidated financial information at the dates and for the periods presented. Our fiscal year ends on
the Saturday closest to January 31. The 2017 fiscal year presented below was a fifty-three week period and the remaining fiscal years presented below
were fifty-two week periods. The fiscal year financial information has been derived from our audited financial statements. You should read the
following information in conjunction with our consolidated financial statements and related notes and the other financial and statistical information
that we include or incorporate by reference in this prospectus supplement and the accompanying prospectus.

2019 (c)

2018

2017 (d)
(Dollars in Millions, Except per

Square Foot Data)

Net sales

Dollars
$18,885
$19,167
$19,036
Net sales increase (decrease)

(1.5)%
0.7%

2.1%
Comparable sales (a)

(1.3)%
1.7%

1.5%
Per selling square foot (b)
$
229
$
231
$
229
Total revenue
$19,974
$20,229
$20,084
Gross margin as a percent of net sales

35.7%
36.4%

36.0%
Selling, general, and administrative expenses ("SG&A")

Dollars
$ 5,705
$ 5,601
$ 5,501
As a percent of total revenue

28.6%
27.7%

27.4%
Operating income

Dollars

Reported
$ 1,099
$ 1,361
$ 1,416
As a percent of total revenue

Reported

5.5%
6.7%

7.1%
Net income

Reported
$
691
$
801
$
859
Balance sheet

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Total assets
$14,555
$12,469
$13,389
Working capital
$ 1,880
$ 2,105
$ 2,671
Long-term debt
$ 1,856
$ 1,861
$ 2,797
Finance lease and financing obligations
$ 1,491
$ 1,638
$ 1,717
Operating lease liabilities
$ 2,777
$
--
$
--
Shareholders' equity
$ 5,450
$ 5,527
$ 5,419
Cash flow

Net cash provided by operating activities
$ 1,657
$ 2,107
$ 1,691
Capital expenditures
$
855
$
578
$
672
Kohl's store information

Number of stores
1,159
1,159
1,158
Total square feet of selling space (in thousands)
82,192
82,620
82,804

(a)
Kohl's store sales are included in comparable sales after the store has been open for 12 full months. Digital sales and sales at remodeled and
relocated Kohl's stores are included in comparable sales, unless square footage has changed by more than 10%. 2019 compares the 52 weeks
ended February 1, 2020 and February 2, 2019. 2018 compares the 52 weeks ended February 2, 2019 and February 3, 2018.
(b)
Net sales per selling square foot includes in-store and digital merchandise sales.
(c)
Includes adoption of ASC 842 Leases. See Note 3 of the Consolidated Financial Statements in our Annual Report on Form 10-K for the year
ended February 1, 2020.
(d)
Fiscal 2017 was a 53-week year. The impact of the 53rd week is approximated as follows: net sales were $170 million; other revenues were
$10 million; SG&A was $40 million; interest was $3 million; and net income was $15 million.

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RISK FACTORS
You should carefully consider the following risk factors, the risk factors described in Item 1A to our annual report on Form 10-K for the fiscal year
ended February 1, 2020 ("2019 Form 10-K"), as well as the other information included in or incorporated by reference into this prospectus supplement and
the accompanying prospectus, before making an investment decision. The following is not intended as, and should not be construed as, an exhaustive list of
relevant risk factors. There may be other risks that a prospective investor should consider that are relevant to its own particular circumstances or generally.
Risks Relating to Our Business
The impact of COVID-19 has had a material adverse impact on our business, financial condition, and results of operations.
The impact of and actions taken in response to COVID-19 have had a significant impact on the retail industry generally and our business, starting in
the first quarter of fiscal year 2020. We cannot presently estimate the full impact of COVID-19, but we expect it to continue to have a material adverse
impact on our business, financial condition, and results of operations.
Risks Relating to Revenues. On March 19, 2020, we temporarily closed our stores nationwide. In connection with the store closures, we
subsequently temporarily furloughed store and store distribution center associates, as well as some corporate office associates whose work was significantly
reduced by the store closures. Due to the store closures, we have experienced a material decline in revenue and material reduction in our cash flow.
Our response to COVID-19 may also impact our customer loyalty. If our customer loyalty is negatively impacted or consumer discretionary
spending habits change, including in connection with rising levels of unemployment, our market share may suffer as a result. To the extent the pandemic
significantly impacts spending or payment patterns of our private label credit card holders, we may receive lower fees from our private label credit card
program.
Risks Relating to Operations. Because we have temporarily closed all of our stores, we have taken steps to reduce operating costs and improve
efficiency, including furloughing a substantial number of our personnel. These steps may have an impact on our ability to attract and retain associates in
the future. If we are unable to attract and retain associates in the future, such as those associates who find other employment during the furlough period, we
may experience operational challenges when we re-open our stores. These risks related to our business, financial condition, and results of operations, are
especially heightened given the uncertainty as to the extent and duration of COVID-19's impact. We may also face demands or requests from our
associates for additional compensation, healthcare benefits or other terms as a result of COVID-19 that could increase costs, and we could experience labor
disputes or disruptions as we continue to implement our COVID-19 mitigation plans.
Our management team is focused on mitigating the impact of COVID-19, which has required and will continue to require a large investment of time
and focus. We reallocated certain of our resources, including decreasing capital expenditures by approximately $500 million and significantly reducing
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expenses across the business including expenses related to marketing, technology and operation. This focus on mitigating the impact of COVID-19 could
result in the delay of new initiatives, including brand launches. It also requires us to take measures to make modifications to our stores and their operation
to help protect the health and well-being of our customers, associates and others when they are re-opened. To the extent these measures are ineffective or
perceived as ineffective, it may harm our reputation and customer loyalty and make our customers less likely to shop in our stores.
Most of our corporate office associates are working remotely. As a result, we face certain operational risks, including heightened cybersecurity risks.

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In addition, we cannot predict the impact that COVID-19 will have on our suppliers, vendors, and other business partners, and each of their financial
conditions; however, any material effect on these parties could adversely impact us.
Risks Relating to Liquidity. In light of the impact of COVID-19 on our business, we have taken several actions to increase our cash position and
preserve financial flexibility, including borrowing the full amount available under our senior secured, asset based revolving credit facility, and accordingly,
our long-term debt has increased substantially since February 1, 2020. This increase in our level of debt may adversely impact our financial and operating
activities or ability to incur additional debt. In addition, as a result of the risks described above, we may be required to raise additional capital, and our
access to and cost of financing will depend on, among other things, global economic conditions, conditions in the global financing markets, the availability
of sufficient amounts of financing, our prospects, our credit ratings, and the outlook for the retail industry as a whole. As a result of COVID-19, some
credit agencies have downgraded our credit ratings. If our credit ratings were to be further downgraded, or general market conditions were to ascribe
higher risk to our credit rating levels, our industry, or our company, our access to capital and the cost of debt financing will be further negatively impacted.
Accordingly, a downgrade may cause our cost of borrowing to further increase. Further, COVID-19 has led to a disruption and volatility in the capital
markets generally, which has also increased the cost of accessing financing. Our access to additional financing and its cost continues to depend on a
number of factors, including economic conditions, financing markets and the outlook for our business and the retail industry as a whole.
In addition, the terms of future debt agreements could include more restrictive covenants, or require incremental collateral, which may further restrict
our business operations or cause future financing to be unavailable due to our covenant restrictions then in effect. Also, if we are unable to comply with the
covenants under our senior secured, asset based revolving credit facility, the lenders under that agreement will have the right to terminate their
commitments thereunder and declare the outstanding loans thereunder to be immediately due and payable. A default under our senior secured, asset based
revolving credit facility could trigger a cross-default, acceleration or other consequences under other indebtedness or financial instruments to which we are
a party. There is no guarantee that debt financings will be available in the future to fund our obligations, or will be available on terms consistent with our
expectations. Additionally, the impact of COVID-19 on the financial markets is expected to adversely impact our ability to raise funds through additional
financings.
COVID-19 could also cause or aggravate other risk factors that we identify in our 2019 Form 10-K, which in turn could materially and adversely
impact our business, financial condition and results of operations. Further, COVID-19 may also affect our business, financial condition and results of
operations in a manner that is not presently known to us or that we currently do not consider to present significant risks to our business, financial condition
and results of operations.
Risks Relating to the Notes
The notes are subject to the prior claims of our secured creditors and are effectively subordinated to the existing and future liabilities of our
subsidiaries.
The notes are our senior unsecured obligations and will rank equally in right of payment to our other senior unsecured debt from time to time
outstanding. The notes will be effectively subordinated to all of our existing and future secured indebtedness or other secured liabilities to the extent of the
value of the assets securing such indebtedness and liabilities. The notes are not secured by any of our assets. At April 16, 2020, we had $1,500 million of
outstanding secured indebtedness under our senior secured, asset based revolving credit facility, under which we are a guarantor. The borrowings under
that facility and our guaranty are secured by substantially all of our and our subsidiaries' assets, other than real estate. Any future claims of secured lenders
with respect to these assets or any other assets securing future indebtedness will be prior to any claim of the holders of the notes with respect to those
assets, and in the event of a bankruptcy, liquidation, dissolution, reorganization or similar proceeding, these pledged assets would be available to satisfy
secured obligations before any payments could be made on the notes. To the extent that such assets could not satisfy in full any such

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secured obligations, the holders of such obligations would have a claim for any shortfall that would rank equally in right of payment with the notes (or
effectively senior to the notes in the case of claims against our subsidiaries). In that case, we might not have sufficient assets remaining to pay amounts due
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on any or all of the notes.
Our subsidiaries are separate and distinct legal entities from us. Our subsidiaries have no obligation to holders of the notes to pay any amounts due
on the notes or to provide us with funds to meet our payment obligations on the notes. In addition, any payment of dividends, loans or advances by our
subsidiaries could be subject to statutory or contractual restrictions. Payments to us by our subsidiaries will also be contingent upon the subsidiaries'
earnings and business considerations. Our right to receive any assets of any of our subsidiaries upon their bankruptcy, liquidation or reorganization, and
therefore the right of the holders of the notes to participate in those assets, will be effectively subordinated to the claims of that subsidiary's creditors,
including trade creditors. In addition, even if we are a creditor of any of our subsidiaries, our right as a creditor would be subordinate to any security
interest in the assets of our subsidiaries and any indebtedness of our subsidiaries senior to that held by us. As of February 1, 2020, we had $1,856 million in
principal amount of long-term indebtedness outstanding on a consolidated basis, none of which was subsidiary indebtedness. On April 16, 2020, we
incurred an additional $1,500 million in senior secured long-term indebtedness under our senior secured, asset based revolving credit facility, which was
subsidiary indebtedness that would be structurally senior to the notes.
We may not be able to generate sufficient cash flow to meet all of our debt service obligations, including those under the notes.
As of February 1, 2020, on an as adjusted basis for the $1,500 million of borrowings drawn under our senior secured, asset based revolving credit
facility in April 2020 and the sale of the notes and the application of the proceeds therefrom, we had long-term indebtedness of $3,456 million outstanding.
Our ability to meet all of our debt service obligations, including those under the notes, and to fund our operations, working capital, capital expenditures and
other important business uses, depends on our ability to generate sufficient cash flow in the future. To a certain extent, our cash flow is subject to general
economic (including the impact of the COVID-19 pandemic), industry, financial, competitive, operating, legislative, regulatory and other factors, many of
which are beyond our control.
We cannot assure you that our business will generate sufficient cash flow from operations or that future sources of cash will be available to us on
favorable terms, or at all, in an amount sufficient to enable us to meet all of our debt service obligations, including those under the notes, or to fund our
other important business uses. If we incur additional indebtedness, our debt service obligations could increase significantly, as to which no assurance can
be given. In addition, we may need to refinance all or a portion of our indebtedness, including the notes, at or prior to maturity. Our ability to refinance our
indebtedness or obtain additional financing will depend on, among other things, our business, financial condition, liquidity, results of operations and
prospects, and market conditions at the time and restrictions in the agreements governing our indebtedness.
If we do not generate sufficient cash flow from operations, and additional borrowings or refinancings are not available to us, we may be unable to
meet all of our debt service obligations, including those under the notes. As a result, we would be forced to take other actions to meet those obligations,
such as selling properties, raising equity or delaying capital expenditures, any of which could have a material adverse effect on us. Furthermore, we cannot
assure you that we will be able to effect any of these actions on favorable terms, or at all.
The indenture under which the notes will be issued does not restrict the amount of additional unsecured debt that we may incur.
The notes and indenture under which the notes will be issued do not place any limitation on the amount of unsecured debt that may be incurred by us.
In the future, depending on liquidity and capital needs, we may enter

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into commitments for additional debt financing and may make borrowings pursuant to such commitments. There can be no assurance that we will enter
into any such debt commitments or make any such borrowings, or that such debt commitments or borrowings will be available to us on terms we find
acceptable or at all. Our incurrence of additional debt may have important consequences for you as a holder of the notes, including making it more difficult
for us to satisfy our obligations with respect to the notes, a loss in the trading value of your notes, if any, and a risk that the credit rating of the notes is
lowered or withdrawn.
Our credit ratings may not reflect all risks of your investment in the notes, and negative changes in our credit ratings may adversely affect your
investments in the notes.
Our credit ratings are an assessment by rating agencies of our ability to pay our debts when due. Consequently, real or anticipated changes in our
credit ratings will generally affect the market value of the notes. These credit ratings may not reflect the potential impact of risks relating to structure or
marketing of the notes. Agency ratings are not a recommendation to buy, sell or hold any security, and may be revised or withdrawn at any time by the
issuing organization. Each agency's rating should be evaluated independently of any other agency's rating.
As a result of general economic uncertainty and the impact of the COVID-19, on March 23, 2020, S&P Global Ratings lowered our rating from BBB
to BBB- with a negative outlook, and on April 1, 2020, Fitch Ratings, Inc. lowered our rating from BBB to BBB- with a negative outlook. Also on April 1,
2020, Moody's Investors Service affirmed our senior unsecured rating at Baa2, and changed the outlook to negative from stable. Any further actual or
anticipated negative changes or downgrades in our credit ratings or ratings outlook or watch, including any announcement that our ratings are under further
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