Notes Payable, Long-Term Debt and Capital Lease Obligations

3 Months Ended

Nov. 30, 2017

Notes Payable, Long-Term Debt and Capital Lease Obligations [Abstract]

Notes Payable, Long-Term Debt and Capital Lease Obligations

6. Notes Payable, Long-Term Debt and Capital Lease Obligations

Notes payable, long-term debt and capital lease obligations outstanding as of November 30, 2017 and August 31, 2017 are summarized below (in thousands):


		Maturity	November 30,		August 31,
		Date	2017		2017
8.250% Senior Notes⁽¹⁾⁽²⁾		March 15, 2018	$	399,745	$	399,506
5.625% Senior Notes⁽¹⁾⁽²⁾		Dec. 15, 2020		397,326		397,104
4.700% Senior Notes⁽¹⁾⁽²⁾		Sept. 15, 2022		496,860		496,696
4.900% Senior Notes⁽¹⁾		July 14, 2023		298,632		298,571
Borrowings under credit facilities⁽³⁾		Nov. 8, 2022		―		―
Borrowings under loans⁽³⁾		Nov. 8, 2022		500,360		458,395
Capital lease obligations				27,529		27,818
Total notes payable, long-term debt and capital lease obligations				2,120,452		2,078,090
Less current installments of notes payable, long-term debt and
	capital lease obligations			427,019		445,498
Notes payable, long-term debt and capital lease obligations, less
	current installments		$	1,693,433	$	1,632,592

⁽¹⁾ The notes are carried at the principal amount of each note, less any unamortized discount and unamortized debt issuance costs.

⁽²⁾ The Senior Notes are the Company’s senior unsecured obligations and rank equally with all other existing and future senior unsecured debt obligations.

⁽³⁾ On November 8, 2017, the Company entered into an amended and restated senior unsecured five-year credit agreement. The credit agreement provides for: (i) the Revolving Credit Facility in the initial amount of $1.8 billion, which may, subject to the lenders’ discretion, potentially be increased up to $2.3 billion and (ii) a $500.0 million Term Loan Facility (collectively the “Credit Facility”). The Credit Facility expires on November 8, 2022. The Revolving Credit Facility is subject to two whole or partial one-year extensions, at the lenders’ discretion. Interest and fees on the Credit Facility advances are based on the Company’s non-credit enhanced long-term senior unsecured debt rating as determined by Standard & Poor’s Ratings Service, Moody’s Investors Service and Fitch Ratings.

During the three months ended November 30, 2017, the interest rates on the Revolving Credit Facility ranged from 2.4% to 4.4% and the interest rates on the Term Loan Facility ranged from 2.6% to 2.7%. Interest is charged at a rate equal to (a) for the Revolving Credit Facility, either 0.000% to 0.575% above the base rate or 0.975% to 1.575% above the Eurocurrency rate and (b) for the Term Loan Facility, either 0.125% to 0.875% above the base rate or 1.125% to 1.875% above the Eurocurrency rate. The base rate represents the greatest of: (i) Citibank, N.A.’s base rate, (ii) 0.50% above the federal funds rate, and (iii) 1.0% above one-month LIBOR, but not less than zero. The Eurocurrency rate represents adjusted LIBOR or adjusted CDOR, as applicable, for the applicable interest period, but not less than zero. Fees include a facility fee based on the revolving credit commitments of the lenders and a letter of credit fee based on the amount of outstanding letters of credit.

Additionally, the Company’s foreign subsidiaries had various additional credit facilities that finance their future growth and any corresponding working capital needs.

As of November 30, 2017, the Company has $2.2 billion in available unused borrowing capacity under its revolving credit facilities.

Debt Covenants

Borrowings under the Company’s debt agreements are subject to various covenants that limit the Company’s ability to: incur additional indebtedness, sell assets, effect mergers and certain transactions, and effect certain transactions with subsidiaries and affiliates. In addition, the Revolving Credit Facility and 4.900% Senior Notes contain debt leverage and interest coverage covenants. The Company is also subject to a covenant requiring the repurchase of the 8.250%, 5.625%, or 4.700% Senior Notes upon a change of control. As of November 30, 2017 and 2016, the Company was in compliance with its debt covenants.

Fair Value

The estimated fair values of the Company's publicly traded debt, including the 8.250%, 5.625% and 4.700% senior notes, were approximately $405.6 million, $431.2 million and $525.3 million, respectively, as of November 30, 2017. The fair value estimates are based upon observable market data (Level 2 criteria). The estimated fair value of the Company's private debt, the 4.900% senior notes, was approximately $311.7 million, as of November 30, 2017. This fair value estimate is based on the Company's indicative borrowing cost derived from discounted cash flows (Level 3 criteria). The carrying amounts of borrowings under credit facilities and under loans approximate fair value as interest rates on these instruments approximate current market rates.