BREAD FINANCIAL HOLDINGS, INC.BFH
BREAD FINANCIAL HOLDINGS, INC. Debt Disclosure
BORROWINGS OF LONG-TERM AND OTHER DEBT
Long-term and other debt consisted of the following as of December 31:
| Description | 2025 | 2024 | Contractual Maturities | Interest Rates | ||||||||||||||||||||||
| (Millions, except percentages) | ||||||||||||||||||||||||||
| Long-term and other debt: | ||||||||||||||||||||||||||
| Revolving line of credit | $ | — | $ | — | October 2028 | (1) | ||||||||||||||||||||
| Senior notes due 2026 | — | 100 | January 2026 | 7.00% | ||||||||||||||||||||||
| Convertible senior notes due 2028 | — | 10 | June 2028 | 4.25% | ||||||||||||||||||||||
| Senior notes due 2029 | — | 900 | March 2029 | 9.75% | ||||||||||||||||||||||
| Senior notes due 2031 | 500 | — | May 2031 | 6.75% | ||||||||||||||||||||||
| Subordinated notes due 2035 | 400 | — | June 2035 | 8.38% | ||||||||||||||||||||||
| Subtotal | 900 | 1,010 | ||||||||||||||||||||||||
| Less: Unamortized debt issuance costs | 14 | 11 | ||||||||||||||||||||||||
| Total long-term and other debt | $ | 886 | $ | 999 | ||||||||||||||||||||||
| Debt issued by consolidated VIEs: | ||||||||||||||||||||||||||
| Fixed rate asset-backed term note securities | $ | 1,350 | $ | 1,350 | Various – May 2026 to Jul. 2027 | 4.62% to 5.47% | ||||||||||||||||||||
| Conduit asset-backed securities | 2,075 | 3,213 | Various – Oct. 2026 to Feb. 2027 | (2) | ||||||||||||||||||||||
| Subtotal | 3,425 | 4,563 | ||||||||||||||||||||||||
| Less: Unamortized debt issuance costs | 3 | 5 | ||||||||||||||||||||||||
| Total debt issued by consolidated VIEs | $ | 3,422 | $ | 4,558 | ||||||||||||||||||||||
| Total borrowings of long-term and other debt | $ | 4,308 | $ | 5,557 | ||||||||||||||||||||||
______________________________
(1)The interest rate is based upon the Secured Overnight Financing Rate (SOFR) plus an applicable margin.
(2)The interest rate is based upon SOFR, or the asset-backed commercial paper costs of each individual conduit provider plus an applicable margin. As of December 31, 2025, the interest rates ranged from 4.77% to 4.81% with a weighted average rate of 4.78%. As of December 31, 2024, the interest rates ranged from 5.48% to 5.60% with a weighted average rate of 5.54%.
Certain of our long-term debt agreements include various restrictive financial and non-financial covenants. If we do not comply with certain of these covenants and an event of default occurs and remains uncured, the maturity of amounts outstanding may be accelerated and become payable, and, with respect to our credit agreement, the associated commitments may be terminated. As of December 31, 2025, we were in compliance with all such covenants.
Long-term and Other Debt
Throughout 2025 we engaged in a number of financing-related transactions, including the issuances of senior and subordinated notes, the completion of tender offers to repurchase certain outstanding senior and subordinated notes, the redemption of certain senior notes and the completion of the repurchases of 100% of our outstanding convertible senior notes. Each of these transactions, as well as other matters relating to our liquidity and capital resources during the year, are described in more detail below.
Credit Agreement
In October 2024, we entered into our amended credit agreement with the Parent Company, as borrower, certain of our domestic subsidiaries, as guarantors, JPMorgan Chase Bank, N.A., as administrative agent and lender, and various other financial institutions, as lenders, which provides for a $700 million senior unsecured revolving credit facility (the Revolving Credit Facility), which matures in October 2028. As of December 31, 2025, our Revolving Credit Facility was undrawn and all $700 million remained available for future borrowings.
Senior Notes Due 2026, 2028, 2029 and 2031
The Senior Notes set forth below are each governed by their respective indenture that includes usual and customary negative covenants and events of default. These Senior Notes are unsecured and are guaranteed on a senior unsecured basis
by certain of our existing and future domestic restricted subsidiaries that incur or in any other manner become liable for any debt under our domestic credit facilities, including the Revolving Credit Facility.
7.000% Senior Notes Due 2026
In September 2020, we issued and sold $500 million aggregate principal amount of 7.000% Senior Notes due January 15, 2026 (Senior Notes due 2026). In January 2024, we redeemed $400 million in aggregate principal amount of the Senior Notes due 2026, and in January 2025, with cash on hand, we redeemed the remaining $100 million in aggregate principal amount of our Senior Notes due 2026.
4.25% Convertible Senior Notes Due 2028
In June 2023, we issued and sold $316 million aggregate principal amount of 4.25% Convertible Senior Notes due 2028 (the Convertible Notes). Before we repurchased 100% of our outstanding Convertible Notes, the Convertible Notes bore interest at an annual rate of 4.25%, payable semi-annually in arrears on June 15 and December 15 of each year. The Convertible Notes were scheduled to mature on June 15, 2028, unless earlier repurchased, redeemed or converted.
During 2025, through discrete, privately-negotiated repurchase transactions, we repurchased the remaining $10 million in aggregate principal amount of outstanding Convertible Notes. The aggregate purchase price, or settlement value, for the repurchases during 2025 was $16 million, which was funded with cash on hand. In connection with the repurchases, we recognized a $3 million inducement expense in Other non-interest expenses representing the total settlement value, inclusive of transaction fees, in excess of the total conversion value (calculated in accordance with the indenture governing the Convertible Notes), as well as a $4 million reduction in Additional paid-in capital (APIC) related to the total conversion value paid in excess of the carrying value of the Convertible Notes repurchased and a deferred tax impact. As of December 31, 2025, all of the Convertible Notes had been extinguished and no Convertible Notes remained outstanding.
Prior to the repurchases of the Convertible Notes, the embedded conversion feature within the Convertible Notes was both considered indexed to the Company’s own equity and met the equity classification conditions; therefore, it did not require derivative accounting. Upon entering into the repurchase agreements that themselves required cash settlement of our conversion obligation in excess of the aggregate principal amount of the Convertible Notes, the embedded conversion feature no longer met the equity classification conditions; therefore, requiring bifurcation and derivative accounting.
In connection with the issuance of the Convertible Notes, we entered into privately negotiated capped call (Capped Call) transactions with certain financial institution counterparties. At that time, these transactions were expected generally to reduce potential dilution to our common stock upon any conversion of Convertible Notes and/or offset any cash payments we were required to make in excess of the principal amount of the Convertible Notes, with such reduction and/or offset subject to a cap, based on the cap price.
All of the Capped Call transactions continue to remain outstanding, notwithstanding that no Convertible Notes remain outstanding. Although we do not trade or speculate in derivatives, we may seek to opportunistically terminate the Capped Call transactions (in full or in part from time to time) or leave the Capped Call transactions outstanding, possibly until maturity, in any such case with the objective of optimizing the stockholder value we receive under these transactions. The value that we ultimately realize from the Capped Call transactions (either in the form of cash or shares of our common stock, at our election) is subject to a number of variables, most significantly our stock price at the time the Capped Call transactions are terminated, and is subject to other potential adjustments based on the amount of our quarterly dividend, the volume of our share repurchases and other factors.
For additional information on the June 2023 issuance of our Convertible Notes and the subsequent repurchases in 2024, as well as information on our Capped Call transactions, refer to Note 10, “Borrowings of Long-Term and Other Debt” to the audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.
9.750% Senior Notes Due 2029
In June 2025, we completed a cash tender offer (the Tender Offer) pursuant to which we repurchased $150 million aggregate principal amount of our 9.750% Senior Notes due 2029 (Senior Notes due 2029). The consideration paid in the Tender Offer for each $1,000 principal amount of the Senior Notes due 2029 was $1,071, plus accrued and unpaid interest. In connection with the repurchase, we recognized a $13 million loss on extinguishment in Other non-interest expenses representing the total settlement value, inclusive of transaction fees, in excess of the carrying value of the Senior Notes due 2029.
In August 2025, we completed another cash tender offer (the Third Quarter Tender Offer) pursuant to which we repurchased $31 million in aggregate principal amount of our Senior Notes due 2029, as well as $0.1 million aggregate principal amount of 8.375% Subordinated Notes due 2035. The consideration paid in the Third Quarter Tender Offer for each $1,000 principal amount of the Senior Notes due 2029 was $1,070, plus accrued and unpaid interest. In connection with the repurchase, we recognized a $3 million loss on extinguishment in Other non-interest expenses representing the total settlement value, inclusive of transaction fees, in excess of the carrying value of the Senior Notes due 2029. See further discussion of our 8.375% Subordinated Notes due 2035, below.
In November 2025, we redeemed the remaining $719 million in aggregate principal amount of our Senior Notes due 2029 with the net proceeds from the issuance of the 6.750% Senior Notes due 2031 (as discussed below), together with cash on hand. The consideration paid in the redemption for each $1,000 principal amount of the Senior Notes due 2029 was $1,068, plus accrued and unpaid interest. In connection with the redemption, we recognized a $55 million loss on extinguishment in Other non-interest expenses representing the total settlement value, inclusive of transaction fees, in excess of the carrying value of the Senior Notes due 2029. There were no Senior Notes due 2029 outstanding as of December 31, 2025. For additional information on the issuance of our Senior Notes due 2029, refer to Note 10, “Borrowings of Long-Term and Other Debt” to the audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.
6.750% Senior Notes Due 2031
In November 2025, we issued $500 million aggregate principal amount of 6.750% Senior Notes due 2031 (Senior Notes due 2031). The Senior Notes due 2031 accrue interest on the outstanding principal amount at a rate of 6.750% per annum from November 6, 2025, payable semi-annually in arrears, on May 15 and November 15 of each year, beginning on May 15, 2026. The Senior Notes due 2031 will mature on May 15, 2031, unless subject to earlier repurchase or redemption. We used the net proceeds from the offering of the Senior Notes due 2031, together with cash on hand, to fund the redemption in full of our outstanding Senior Notes due 2029.
8.375% Subordinated Notes Due 2035
In March 2025, we issued and sold $400 million in aggregate principal amount of 8.375% Fixed-Rate Reset Subordinated Notes due 2035 (the Subordinated Notes). The Subordinated Notes accrue interest on the outstanding principal amount (i) at a rate per annum equal to 8.375% from, and including, March 10, 2025, to, but excluding, June 15, 2030 (the Reset Date), and (ii) from, and including, the Reset Date to, but excluding, the maturity date at a rate per annum equal to the Five-Year U.S. Treasury Rate as of the date that is two business days prior to the Reset Date, plus 430 basis points. Interest on the Subordinated Notes is payable semiannually in arrears on June 15 and December 15 of each year. The Subordinated Notes will mature on June 15, 2035, unless subject to earlier repurchase or redemption. As noted above, as part of the Third Quarter Tender Offer, we repurchased $0.1 million aggregate principal amount of Subordinated Notes.
We used $250 million of the net proceeds from the Subordinated Notes offering to enter into a subordinated promissory note between Parent Company, as lender, and CCB, as borrower, on terms substantially the same as those of the Subordinated Notes. The subordinated promissory note is eliminated in consolidation.
Debt Issued by Consolidated VIEs
An asset-backed security is a security whose value and income payments are derived from and collateralized by a specified pool of underlying assets – in our case, our credit card loans. The sale of the pool of underlying assets to investors is accomplished through a securitization process. We regularly sell our credit card loans to our Trusts, which are
consolidated. The liabilities of these consolidated VIEs include asset-backed securities for which creditors, or beneficial interest holders, do not have recourse to our general credit.
Conduit Facilities
We maintained committed syndicated bank Conduit Facilities to support the funding of our credit card loans for our Trusts. Borrowings outstanding under each private Conduit Facility bear interest at a margin above SOFR, or the asset-backed commercial paper costs of each individual conduit provider.
The table below summarizes our conduit capacities, borrowings and maturities for the periods presented:
| (Millions) | December 31, 2024 | Commitment | December 31, 2025 | |||||||||||||||||||||||||||||||||||
| Conduit Facilities | Capacity | Drawn (6) | Change | Capacity | Drawn | Maturity Date (7) | ||||||||||||||||||||||||||||||||
| Comenity Bank | ||||||||||||||||||||||||||||||||||||||
WFNMNT 2009-VFN (1) | $ | 2,650 | $ | 1,955 | $ | (900) | $ | 1,750 | $ | 1,363 | October 2026 | |||||||||||||||||||||||||||
WFNMT 2009-VFC1 (2) | — | 141 | — | — | — | — | ||||||||||||||||||||||||||||||||
| Comenity Capital Bank | ||||||||||||||||||||||||||||||||||||||
WFCMNT 2009-VFN (3) | 2,250 | 867 | (250) | 2,000 | 712 | February 2027 | ||||||||||||||||||||||||||||||||
CCAST 2023-VFN1 (4) | 250 | 250 | (250) | — | — | — | ||||||||||||||||||||||||||||||||
CCAST 2024-VFN1 (5) | 200 | — | (200) | — | — | — | ||||||||||||||||||||||||||||||||
| Total | $ | 5,350 | $ | 3,213 | $ | (1,600) | $ | 3,750 | $ | 2,075 | ||||||||||||||||||||||||||||
______________________________
(1)2009-VFN Conduit issued under World Financial Network Credit Card Master Note Trust (WFNMNT). In October 2025, the 2009-VFN Conduit commitment was reduced by $900 million to $1.75 billion, and the Maturity Date was extended to October 2026.
(2)2009-VFC1 Conduit issued under World Financial Network Credit Card Master Trust III (WFNMT) was retired following controlled amortization, meaning the period in which principal collections are accumulated to pay down the outstanding principal amount of the notes issued under the Conduit Facility, in June 2025 pursuant to the termination, consent and waiver agreement.
(3)2009-VFN Conduit issued under World Financial Capital Master Note Trust (WFCMNT). In February 2025, the 2009-VFN Conduit commitment was reduced by $250 million to $2 billion, and the Maturity Date was extended to February 2026. Then in December 2025, the Maturity Date of the 2009-VFN Conduit was further extended to February 2027.
(4)2023-VFN1 Conduit issued under Comenity Capital Asset Securitization Trust (CCAST). The purchase commitment expired on September 29, 2025 and the 2023-VFN1 Conduit was retired on October 1, 2025 pursuant to the termination, consent and waiver agreement.
(5)2024-VFN1 Conduit issued under CCAST was retired in February 2025 pursuant to the termination, consent and waiver agreement.
(6)Amounts drawn do not include $1.1 billion of debt in the form of subordinated notes issued by WFNMNT and WFCMNT as of December 31, 2024, which were not sold, but were retained by us as credit enhancements and therefore have been eliminated from the Total. The credit enhancements represented by subordinated notes issued by WFCMNT and WFNMNT were replaced with excess collateral amounts in February 2025 and October 2025, respectively, as defined in the relevant indenture supplements.
(7)Maturity Date with respect to conduit borrowings means the date on which the revolving period for the applicable Conduit Facility expires. The revolving period may be extended or renewed (unless an early amortization event occurs prior to the Maturity Date). Absent the extension or renewal of the revolving period, the Conduit Facility shall enter controlled amortization on the Maturity Date and may no longer be drawn upon.
Fixed Rate Asset-Backed Term Notes
In May 2024, WFNMNT issued $570 million of Series 2024-A public term asset-backed notes, which mature in April 2027. The offering consisted of $500 million of Class A notes with a fixed interest rate of 5.47% per year, $44 million of zero coupon Class M notes, and $26 million of zero coupon Class B notes. The Class M and B notes were retained by us and are eliminated in consolidation. In addition, in August 2024 WFNMNT issued $500 million of Series 2024-B public term asset-backed notes, which mature in July 2027. The offering consisted of $500 million of Class A notes with a fixed interest rate of 4.62% per year. There were no asset-backed notes issued in 2025.
Maturities
The future principal payments for our Long-term and other debt are as follows, as of December 31, 2025:
| Year | Long-Term and Other Debt | Debt Issued by Consolidated VIEs | Total | |||||||||||||||||
| (Millions) | ||||||||||||||||||||
| 2026 | $ | — | $ | 1,713 | $ | 1,713 | ||||||||||||||
| 2027 | — | 1,712 | 1,712 | |||||||||||||||||
| 2028 | — | — | — | |||||||||||||||||
| 2029 | — | — | — | |||||||||||||||||
| 2030 | — | — | — | |||||||||||||||||
| Thereafter | 900 | — | 900 | |||||||||||||||||
| Total maturities | 900 | 3,425 | 4,325 | |||||||||||||||||
| Unamortized debt issuance costs | (14) | (3) | (17) | |||||||||||||||||
| $ | 886 | $ | 3,422 | $ | 4,308 | |||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 13, 2026 | Showing above |
| 2020 | Feb 26, 2021 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.