NOTE 6 – DEBT

Short-term borrowings consist of lines of credit that are secured by certain assets of the Company and its subsidiaries, which, in some cases, are guaranteed by the Company. The following table summarizes the balances of total facilities, facilities used and facilities available (in thousands):



			Facilities Used
	Total Amount		Short-term		Letters of		Facilities		Weighted average
	of Facilities		Borrowings		Credit		Available		interest rate
February 28, 2017	$	69,000	$	6,561	$	—	$	62,439	10.1	%
August 31, 2016	$	65,000	$	16,534	$	9,224	$	39,242	10.1	%

As of February 28, 2017 and August 31, 2016, the Company had approximately $40.0 million of short-term facilities in the U.S. that require compliance with certain quarterly financial covenants. As of February 28, 2017 and August 31, 2016, the Company was in compliance with respect to these covenants. Each of the facilities expires annually and is normally renewed.

The following table provides the changes in long-term debt for the six months ended February 28, 2017:



(Amounts in thousands)	Current portion of long-term debt		Long-term debt (net of current portion)		Total
Balances as of August 31, 2016	$	14,565	$	73,542	$	88,107	(1)
Proceeds from long-term debt incurred during the period:
MFUG Union Bank		—		35,700		35,700
Repayments of long-term debt:
Regularly scheduled loan payments		—		(7,231)		(7,231)
Translation adjustments on foreign-currency debt of subsidiaries whose functional currency is not the U.S. dollar (2)		58		(69)		(11)
Balances as of February 28, 2017	$	14,623	$	101,942	$	116,565	(3)

⁽¹⁾

The carrying amount of non-cash assets assigned as collateral for these loans was $102.4 million. No cash assets were assigned as collateral for these loans.

⁽²⁾

These foreign currency translation adjustments are recorded within Other comprehensive income.

⁽³⁾

The carrying amount of non-cash assets assigned as collateral for these loans was $141.8 million. No cash assets were assigned as collateral for these loans.

In January 2017, the Company finalized its acquisition of a distribution center in Medley, Miami-Dade County, Florida, for a total purchase price of approximately $46.0 million. The Company will transfer the majority of its Miami distribution center activities located in the previously leased facilities. This should be completed by the end of the third quarter of fiscal year 2017. To finance the acquisition of this property, the Company entered into a 10-year real estate secured loan with MUFG Union Bank, N.A. (“Union Bank”) of $35.7 million in January 2017. This loan has a variable interest rate of 30-day LIBOR plus 1.7%, with monthly principal and interest payments maturing in 2027. The Company also entered into an interest rate hedge with Union Bank for $35.7 million, the notional amount. Under the hedge, the Company will receive variable 30-day LIBOR plus 1.7% and pay fixed (3.65%), with an effective date of March 1, 2017 and maturity date of March 1, 2027. The Company intends to terminate portions of the existing leased Miami distribution facilities or enter into sublease agreements for portions of the leased facility. The Company will record costs related to the termination of the leased facility as liabilities, with the related expenses as warehouse expenses, once the leased facility is available for subleasing.

As of February 28, 2017, the Company had approximately $105.3 million of long-term loans in the U.S., Trinidad, Panama, El Salvador, Honduras, Costa Rica, Barbados and Colombia that require these subsidiaries to comply with certain annual or quarterly financial covenants, which include debt service and leverage ratios. As of February 28, 2017, the Company was in compliance with all covenants or amended covenants.

As of August 31, 2016, the Company had approximately $76.0 million of long-term loans in Trinidad, Panama, El Salvador, Honduras, Costa Rica, Barbados, and Colombia that require these subsidiaries to comply with certain annual or quarterly financial covenants, which include debt service and leverage ratios. As of August 31, 2016, the Company was in compliance with all covenants or amended covenants.

Annual maturities of long-term debt are as follows (in thousands):



Twelve Months Ended February 28,	Amount
2018	$	14,165
2019		13,760
2020 (1)		29,364
2021		19,354
2022		3,405
Thereafter		33,322
Total (2)	$	113,370

⁽¹⁾

The year 2020 is a leap year with the period ending February 29th.

⁽²⁾

In the case of loans subject to cross-currency interest rate swaps, the Company has used the effective rate to the Company under the applicable derivative obligation as of February 28, 2017 to disclose the future commitments of the related long-term debt.