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LONG-TERM DEBT | 12 Months Ended
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Feb. 29, 2016
LONG-TERM DEBT |
LONG-TERM DEBT | NOTE 9 – LONG-TERM DEBT We have a credit agreement (the “Credit Agreement”) with Bank of America, N.A., as administrative agent, and other lenders that provides for an unsecured total revolving commitment of $650 million as of February 29, 2016. The commitment under the credit agreement terminates on January 16, 2020. Accordingly, borrowings under the Credit Agreement are reported as long-term debt. Borrowings accrue interest under one of two alternative methods as described in the Credit Agreement. With each borrowing against our credit line, we can elect the interest rate method based on our funding needs at the time. We also incur loan commitment and letter of credit fees under the Credit Agreement. Outstanding letters of credit reduce the borrowing availability under the Credit Agreement on a dollar-for-dollar basis. In connection with the amendments to our Credit Agreement in fiscal year 2015, we incurred a total of $4.59 million in new debt acquisition costs that are being amortized over the remaining term of the Credit Agreement. As of February 29, 2016, there was $550.10 million in revolving debt and $1.50 million of open letters of credit outstanding under the Credit Agreement. As of February 29, 2016, the amount available for borrowings under the Credit Agreement was $98.40 million. A summary of long-term debt is as follows: LONG-TERM DEBT (dollars in thousands)
|  | Original |  |  |  |  |  |  |
|  | Date |  | Interest |  |  |  | Last Day of February,
|  | Borrowed |  | Rates |  | Matures |  | 2016 |  | 2015
$37.61 million unsecured loan with the Mississippi Business Finance Corporation (the "MBFC Loan"), interest is set and payable quarterly at a Base Rate, plus a margin of up to 1.00%, or applicable LIBOR plus a margin of up to 2.00%, as determined by the interest rate elected and the Leverage Ratio. Loan subject to holder's call on or after March 1, 2018. Loan can be prepaid without penalty. (1) |  | 03/13 |  | Floating |  | 03/23 |  | $ | 33,807 |  | $ | 35,707
$100 million unsecured Senior Notes payable at a fixed interest rate of 3.90%. Interest payable semi-annually. Annual principal payments of $20 million began in January 2014. Prepayment of notes are subject to a "make whole" premium. |  | 01/11 |  | 3.90 | % | 01/18 |  |  | 40,000 |  |  | 60,000
Credit Agreement |  | 01/15 |  | Floating |  | 01/20 |  |  | 550,100 |  |  | 337,500
Total long-term debt |  |  |  |  |  |  |  |  | 623,907 |  |  | 433,207
Less current maturities of long-term debt |  |  |  |  |  |  |  |  | (23,800) |  |  | (21,900)
Long-term debt, excluding current maturities |  |  |  |  |  |  |  | $ | 600,107 |  | $ | 411,307
| (1) |  | $1.90 million in principal payments were made on March 1, 2015 and 2014, respectively. The remaining loan balance is payable as follows: $3.80 million on March 1, 2016; $5.70 million on March 1, 2017; $1.90 million on March 1, 2018 through 2022; and $14.81 million on March 1, 2023. Any remaining outstanding principal and interest is due upon maturity on March 1, 2023.
The fair market value of the fixed rate debt at February 29, 2016 computed using a discounted cash flow analysis and comparable market rates was $40.79 million compared to the $40 million book value and represents a Level 2 liability. Our other long-term debt has floating interest rates, and its book value approximates its fair value at February 29, 2016. All of our debt is unconditionally guaranteed, on a joint and several basis, by the Company and certain of its subsidiaries. Our debt agreements require the maintenance of certain financial covenants, including maximum leverage ratios, minimum interest coverage ratios and minimum consolidated net worth levels (as each of these terms is defined in the various agreements). Our debt agreements also contain other customary covenants, including, among other things, covenants restricting or limiting the Company, except under certain conditions set forth therein, from (1) incurring debt, (2) incurring liens on its properties, (3) making certain types of investments, (4) selling certain assets or making other fundamental changes relating to mergers and consolidations, and (5) repurchasing shares of our common stock and paying dividends. As of February 29, 2016, our debt agreements effectively limited our ability to incur more than $64.34 million of additional debt from all sources, including our Credit Agreement. We were in compliance with the terms of these agreements as of February 29, 2016. The following table contains information about interest rates on our Credit Agreement and the related weighted average borrowings outstanding for the periods covered by our consolidated statements of income: INTEREST RATES ON CREDIT AGREEMENT (in thousands)
|  | Fiscal Years Ended the Last Day of February, |
|  | 2016 |  | 2015 |  | 2014 |
Average borrowings outstanding (1) |  | $ | 399,800 |  | $ | 300,280 |  | $ | 29,680 |
Average interest rate during each year (2) |  |  | 1.6 | % |  | 2.5 | % |  | 1.3 | %
Interest rate range during each year |  |  | 1.4 - 4.0 | % |  | 1.9 - 4.4 | % |  | 1.2 - 3.6 | %
Weighted average interest rates on borrowings outstanding at year end |  |  | 2.8 | % |  | 1.9 | % |  | 0.0 | %
(1)Average borrowings outstanding is computed as the average of the current and four prior quarters ending balances of our credit facility. (2) The average interest rate during each year is computed by dividing the total interest expense associated with our credit facility for a fiscal year by the average borrowings outstanding for the same fiscal year. The following table contains a summary of the components of our interest expense for the periods covered by our consolidated statements of income: INTEREST EXPENSE (in thousands)
|  | Fiscal Years Ended the Last Day of February,
|  | 2016 |  | 2015 |  | 2014
Interest and commitment fees |  | $ | 9,949 |  | $ | 11,958 |  | $ | 5,610
Deferred finance costs |  |  | 1,158 |  |  | 1,846 |  |  | 911
Interest rate swap settlements, net |  |  | - |  |  | 1,218 |  |  | 3,672
Cross-currency debt swap |  |  | (11) |  |  | - |  |  | -
Total interest expense |  | $ | 11,096 |  | $ | 15,022 |  | $ | 10,193

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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