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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables)

9 Months Ended

May 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Interest Rate Derivatives

The following table summarizes agreements for which the Company has recorded cash flow hedge accounting for the nine months ended May 31, 2023:

Entity

Date Entered into

Derivative Financial Counter- party

Derivative Financial Instruments

Initial US$ Notional Amount

US$ Loan Held With

Floating Leg (swap counter-party)

Fixed Rate for PSMT Subsidiary

Settlement Dates

Effective Period of swap

Colombia subsidiary

12-Apr-23

Citibank, N.A. ("Citi")

Cross currency interest rate swap

$

10,000,000

PriceSmart, Inc.

4.00%

11.40

%

11th day of each July, October, January and April, beginning on July 11, 2023

April 12, 2023 - April 11, 2028

Colombia subsidiary

26-Sep-22

Citibank, N.A. ("Citi")

Cross currency interest rate swap

$

12,500,000

PriceSmart, Inc.

3.00%

10.35

%

24th day of each December, March, June and September beginning December 26, 2022

September 26, 2022 - September 24, 2024

Colombia subsidiary

3-May-22

Citibank, N.A. ("Citi")

Cross currency interest rate swap

$

10,000,000

PriceSmart, Inc.

3.00%

9.04

%

3rd day of each May, August, November and February, beginning on August 3, 2022

May 3, 2022 - May 3, 2027

Colombia subsidiary

17-Nov-21

Citibank, N.A. ("Citi")

Cross currency interest rate swap

$

10,000,000

PriceSmart, Inc.

3.00%

8.40

%

17th day of each February, May, August, and November, beginning on February 17, 2022

November 17, 2021 - November 18, 2024

Colombia subsidiary

3-Dec-19

Citibank, N.A. ("Citi")

Cross currency interest rate swap

$

7,875,000

Citibank, N.A.

Variable rate 3-month Libor plus 2.45%

7.87

%

3rd day of each December, March, June and September beginning March 3, 2020

December 3, 2019 - December 3, 2024

Colombia subsidiary

27-Nov-19

Citibank, N.A. ("Citi")

Cross currency interest rate swap

$

25,000,000

Citibank, N.A.

Variable rate 3-month Libor plus 2.45%

7.93

%

27th day of each November, February, May and August beginning February 27, 2020

November 27, 2019 - November 27, 2024

PriceSmart, Inc.

7-Nov-16

MUFG Union Bank, N.A. ("Union Bank")

Interest rate swap

$

35,700,000

Union Bank

Variable rate 3-month Libor plus 1.70%

3.65

%

1st day of each month beginning on April 1, 2017

March 1, 2017 - March 1, 2027

Schedule of Cash Flow Hedging Instruments

For the three and nine months ended May 31, 2023 and May 31, 2022, the Company included the gain or loss on the hedged items (that is, variable-rate borrowings) in the same line item—interest expense—as the offsetting gain or loss on the related interest rate swaps as follows (in thousands):

Income Statement Classification						Interest expense on borrowings(1)						Cost of swaps(2)						Total
Interest expense for the three months ended May 31, 2023						$	1,108					$	210					$	1,318
Interest expense for the three months ended May 31, 2022						$	618					$	871					$	1,489
Interest expense for the nine months ended, May 31, 2023						$	3,538					$	747					$	4,285
Interest expense for the nine months ended May 31, 2022						$	1,720					$	2,628					$	4,348

(1)This amount is representative of the interest expense recognized on the underlying hedged transactions.

(2)This amount is representative of the interest expense recognized on the interest rate swaps and cross-currency swaps designated as cash flow hedging instruments.

Schedule of Notional Amounts of Outstanding Derivative Positions

The total notional balance of the Company’s pay-fixed/receive-variable interest rate swaps and cross-currency interest rate swaps was as follows (in thousands):

						Notional Amount as of
Floating Rate Payer (Swap Counterparty)						May 31, 2023						August 31, 2022
Union Bank						$	30,388					$	31,344
Citibank N.A.						66,431						66,353
Scotiabank						—						8,625
Total						$	96,819					$	106,322

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

The table summarizes the effect of the fair value of interest rate swap and cross-currency interest rate swap derivative instruments that qualify for derivative hedge accounting and its associated tax effect on accumulated other comprehensive (income)/loss (in thousands):

												May 31, 2023																		August 31, 2022
Derivatives designated as cash flow hedging instruments						Balance Sheet Classification						Fair Value						Net Tax Effect						Net OCI						Fair Value						Net Tax Effect						Net OCI
Cross-currency interest rate swaps						Other current assets						$	—					$	—					$	—					$	2,736					$	(348)					$	2,388
Cross-currency interest rate swaps						Other non-current assets						8,873						(3,105)						5,768						10,289						(4,559)						5,730
Cross-currency interest rate swaps						Other current liabilities						—						—						—						(82)						25						(57)
Cross-currency interest rate swaps						Other long-term liabilities						(1,164)						407						(757)						—						—						—
Interest rate swaps						Other non-current assets						1,886						(416)						1,470						1,596						(6)						1,590
Net fair value of derivatives designated as hedging instruments												$	9,595					$	(3,114)					$	6,481					$	14,539					$	(4,888)					$	9,651

Schedule of Open Non-Deliverable Forward Foreign Exchange Contract

The following table summarizes the non-deliverable forward foreign exchange contracts that are open as of May 31, 2023:

Financial Derivative (Counterparty)

Subsidiary

Dates Entered into (Range)

Derivative Financial Instrument

Total Notional Amounts (in thousands)

Settlement  Dates (Range)

Scotiabank Colpatria, S.A.

Colombia

11-Jan-2023 - 27-Mar-2023

Forward foreign exchange contracts (USD)

$

4,500

8-Sep-2023 - 21-Dec-2023

Citibank, N.A. ("Citi")

Colombia

18-Jan-2023 - 16-Mar-2023

Forward foreign exchange contracts (USD)

$

8,000

22-Jun-2023 - 16-Nov-2023

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Tabular disclosure for cash flow hedging instruments of (a) the location and amount of gains and losses reported in the statement of financial performance and (b) the location and fair value amounts of the instruments reported in the statement of financial position.

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Tabular disclosure of the notional amounts of outstanding derivative positions.

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