Note 15 – 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 $1 billion as of February 28, 2018. The commitment under the Credit Agreement terminates on December 7, 2021. 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. As of February 28, 2018, the outstanding revolving loan principal balance was $269.4 million and the balance of outstanding letters of credit was $7.1. million. As of February 28, 2018, the amount available for borrowings under the Credit Agreement was $723.5 million. Covenants in our debt agreements limit the amount of total indebtedness we can incur. As of February 28, 2018 these covenants effectively limited our ability to incur more than $516.9 million of additional debt from all sources, including our Credit Agreement, or $692.1 million in the event a qualified acquisition is consummated.

A summary of our long-term debt follows:

LONG-TERM DEBT


	Original
	Date	Interest			February 28,		February 28,
(dollars in thousands)	Borrowed	Rates		Matures	2018		2017
Mississippi Business Finance Corporation Loan (the "MBFC Loan")(1)	03/13	Floating		03/23	$	24,219	$	29,903
Senior Notes(2)	01/11	3.9	%	01/18		-		19,763
Credit Agreement(3)	01/15	Floating		12/21		265,650		435,949
Total long-term debt						289,869		485,615
Less current maturities of long-term debt						(1,884)		(24,404)
Long-term debt, excluding current maturities					$	287,985	$	461,211

⁽¹⁾

The MBFC Loan is unsecured with an original balance of $37.6 million and interest set and payable quarterly at a Base Rate, plus a margin of up to 1.0%, or applicable LIBOR plus a margin of up to 2.0%, as determined by the interest rate elected and the Leverage Ratio. The loan is subject to holder’s call on or after March 1, 2018. The loan can be prepaid without penalty. The remaining loan balance is payable as follows: $1.9 million annually on March 1, 2018 through 2022; and $14.8 million on March 1, 2023. Any remaining outstanding principal and interest is due upon maturity on March 1, 2023.

⁽²⁾

Unsecured Senior Notes at a fixed interest rate of 3.9% were paid in full during the fourth quarter of fiscal 2018.

⁽³⁾

Floating interest rates are hedged with an interest rate swap to effectively fix interest rates on $100 million of the outstanding principal balance under the Credit Agreement. Notes 16 and 17 to these consolidated financial statements provide additional information regarding the interest rate swap.

At February 28, 2018, our long-term debt has floating interest rates, and its book value approximates its fair value. The fair market value of the fixed rate debt at February 28, 2017 computed using a discounted cash flow analysis and comparable market rates was $20.1 million compared to the $19.8 million book value.

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. We were in compliance with the terms of these agreements as of February 28, 2018.

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


	Fiscal Years Ended the Last Day of February,
(in thousands)	2018			2017			2016
Average borrowings outstanding (1)	$	382,960		$	498,420		$	399,800
Average interest rate during each year (2)		2.7	%		2.2	%		1.6	%
Interest rate range during each year		2.3 - 4.8	%		1.9 - 4.3	%		1.4 - 4.0	%
Weighted average interest rates on borrowings outstanding at year end		2.9	%		2.3	%		2.8	%

⁽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 the Credit Agreement 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


	Fiscal Years Ended the Last Day of February,
(in thousands)	2018		2017		2016
Interest and commitment fees	$	13,084	$	13,745	$	9,941
Deferred finance costs		887		706		651
Interest rate swap settlements, net		54		-		(11)
Cross-currency debt swap		(74)		(90)		-
Total interest expense	$	13,951	$	14,361	$	10,581