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Debt | 12 Months Ended
--- | ---
May 31, 2021
Debt Disclosure [Abstract] |
Debt | DEBT The following table summarizes the Company's debt as of May 31:
| Carrying Value |  | Fair Value |  | Carrying Value |  | Fair Value
|  | 2021 |  |  | 2020
Loan Agreement: |  |  |  |  |  |  |  |  |  |  |
Revolving Loan | $ | 175.0 |  |  | $ | 175.0 |  |  | $ | 200.0 |  |  | $ | 200.0 |
Unsecured Lines of Credit (weighted average interest rates of 4.7% and 4.6%, respectively) |  | 7.9 |  |  |  | 7.9 |  |  |  | 7.9 |  |  |  | 7.9 |
UK long-term debt |  | 7.3 |  |  |  | 7.3 |  |  |  | 10.6 |  |  |  | 10.6 |
Total debt | $ | 190.2 |  |  | $ | 190.2 |  |  | $ | 218.5 |  |  | $ | 218.5 |
Less: lines of credit and current portion of long-term debt |  | (182.9) |  |  |  | (182.9) |  |  |  | (7.9) |  |  |  | (7.9) |
Total long-term debt | $ | 7.3 |  |  | $ | 7.3 |  |  | $ | 210.6 |  |  | $ | 210.6 |
The following table sets forth the maturities of the carrying values of the Company’s debt obligations as of May 31, 2021 for the fiscal years ended May 31:
2022 | $ | 182.9 |
2023 |  | 7.3 |
2024 |  | — |
2025 |  | — |
2026 |  | — |
Thereafter |  | — |
Total debt | $ | 190.2 |
US Loan Agreement Scholastic Corporation and Scholastic Inc. (each, a “Borrower” and together, the “Borrowers”) are parties to a 5-year credit facility with certain banks (the “Loan Agreement”) with a maturity date of January 5, 2022. The Loan Agreement allows the Company to borrow, repay or prepay and reborrow at any time prior to the maturity date. On December 16, 2020, the Company entered into an amendment to the Loan Agreement (the "Amendment") with a syndicate of banks and Bank of America, N.A., as administrative agent (the "Agent"). The Amendment was accounted for as a debt modification. The principal terms of the credit agreement, as modified, include the following: •the aggregate maximum commitments of the lenders is $250.0, a reduction from the $375.0 pre-amendment commitments, of which a maximum of $225.0 is available until the Company satisfies the pre-amendment covenants in the credit agreement; •the pre-amendment covenants include interest coverage and leverage ratio tests, in which the minimum interest coverage covenant is suspended until after the end of the Company’s fourth fiscal quarter ending May 31, 2021. In addition, the Company is subject to a new covenant requiring Consolidated Liquidity (as defined) of a minimum amount of $200.0; •the securitization of the Company’s inventory and accounts receivable; •a modified limitation on asset sales (not to exceed 10% of Consolidated Total Assets, as defined, excluding sale of collateral); •a facility fee rate of 0.40%; •a limitation on Acquisitions (as defined) to an aggregate amount of $25.0 per fiscal year; •the interest pricing is dependent upon the Borrower’s election of a rate that is either: ◦a Eurodollar Rate equal to the London interbank offered rate (LIBOR), subject to a minimum of 0.25%, plus a spread equal to 2.25%, until receipt of the Company's financial statements and related certificates for the fiscal year ending May 31, 2021, and a spread of 1.60% for any Eurodollar Rate Advance drawn after the delivery by the Company of its financial statements and related certificates for the fiscal year ending May 31, 2021; - or - ◦A Base Rate equal to the higher of (i) the prime rate, (ii) the prevailing Federal Funds rate plus 0.50% or (iii) the Eurodollar Rate for a one month interest period plus 1.00% plus, in each case, a spread equal to 1.25% until receipt of the Company's financial statements and related certificates for the fiscal year ending May 31, 2021 and a spread of 0.60% for any Base Rate Advance drawn after the delivery by the Company of its financial statements and related certificates for the fiscal year ending May 31, 2021; •a limit on quarterly cash dividends of $5.2 per fiscal quarter plus the dollar amount of all cash dividends payable (at the rate applicable as of December 16, 2020) in such fiscal quarter in respect of capital stock of the Company issued after December 16, 2020 as a result of the regular vesting or exercise of issued and outstanding stock awards in the normal course of business. Other restricted payments (e.g., for share repurchases, etc.) are limited to the "builder basket" and leverage construct in the pre-amendment credit agreement together with an additional requirement that the Company have Consolidated Liquidity (as defined) that exceeds $300.0. Prior to the Agent's receipt of the Company's financial statements for the fiscal year ending May 31, 2021, use of this restricted payment basket (apart from dividends) is capped at $30.0; •a portion of the revolving credit facility up to a maximum of $50.0 is available for the issuance of letters of credit. In addition, a portion of the revolving credit facility up to a maximum of $15.0 is available for swingline loans. Under the Loan Agreement, as amended, interest on amounts borrowed is due and payable in arrears on the last day of the interest period (defined as the period commencing on the date of the advance and ending on the last day of the period selected by the Borrower at the time each advance is made). As of May 31, 2021, the all-in borrowing rate on the outstanding borrowings was 2.50%. As of May 31, 2021, the Company had outstanding borrowings of $175.0 under the Loan Agreement. As of the third quarter of fiscal 2021, all outstanding borrowings under the Loan Agreement are classified as current. The Company incurred this obligation in the fourth quarter of fiscal 2020 as a precautionary measure due to the uncertainty resulting from the COVID-19 pandemic. While this obligation is not due until the January 5, 2022 maturity date, the Company may, from time to time, make payments to reduce this obligation when cash from operations becomes available for this purpose. The Company intends to extend the current Loan Agreement, or enter into a new long-term bank credit facility, prior to its expiration on January 5, 2022. As of May 31, 2020, the Company had long term outstanding borrowings of $200.0 under the Loan Agreement. The Company was in compliance with required covenants for all periods presented. The Amendment suspended the minimum interest coverage covenant until after the end of the Company’s fourth fiscal quarter ending May 31, 2021. At May 31, 2021, the Company had open standby letters of credit totaling $4.3 issued under certain credit lines, including $0.4 under the Loan Agreement and $3.9 under the domestic credit lines discussed below. UK Loan Agreements On January 24, 2020, Scholastic Limited UK entered into a term loan facility with a borrowing limit of £6.6 to fund the construction of the new UK facility. The loan had an original maturity date of July 31, 2021, which was extended to July 31, 2022 in May 2021. Under the agreement, the principal balance is due in full in a single payment on the last day of the term and interest on the amount borrowed is due and payable quarterly. The interest is charged at 1.77% per annum over the Base Rate. The Base Rate is currently equal to 0.10% per annum and is subject to change. As of May 31, 2021, the Company had $4.5 outstanding on the loan and $4.8 remaining available credit under this facility. On September 23, 2019, Scholastic Limited UK entered into a term loan agreement to borrow £2.0 to fund a land purchase in connection with the construction of a new UK facility. The loan had an original maturity date of July 31, 2021, which was extended to July 31, 2022 in May 2021. Under the agreement, the principal balance is due in full in a single payment on the last day of the term and interest on the amount borrowed is due and payable quarterly. The interest is charged at 1.77% per annum over the Base Rate. The Base Rate is currently equal to 0.10% per annum and is subject to change. As of May 31, 2021, the Company had $2.8 outstanding on the loan. Lines of Credit As of May 31, 2021, the Company’s domestic credit lines available under unsecured money market bid rate credit lines totaled $10.0. There were no outstanding borrowings under these credit lines as of May 31, 2021 and May 31, 2020. As of May 31, 2021, availability under these unsecured money market bid rate credit lines totaled $6.1. All loans made under these credit lines are at the sole discretion of the lender and at an interest rate and term agreed to at the time each loan is made, but not to exceed 365 days. These credit lines may be renewed, if requested by the Company, at the option of the lender. As of May 31, 2021, the Company had various local currency credit lines, totaling $28.6, underwritten by banks primarily in the United States, Canada and the United Kingdom. Outstanding borrowings under these facilities were $7.9 at May 31, 2021 at a weighted average interest rate of 4.7%, compared to outstanding borrowings of $7.9 at May 31, 2020 at a weighted average interest rate of 4.6%. As of May 31, 2021, amounts available under these facilities totaled $20.7. These credit lines are typically available for overdraft borrowings or loans up to 364 days and may be renewed, if requested by the Company, at the sole option of the lender.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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