Notes Payable and Long-Term Debt

Our notes payable and long-term debt are subject to various restrictive requirements for maintenance of minimum consolidated net worth and other financial ratios. We were in compliance with our debt covenants as of May 31, 2016.



	May 31, 2016		August 31, 2015
	(Dollars in thousands)
Notes payable	$	2,691,633	$	813,717
CHS Capital notes payable	645,219		351,661
Total notes payable	$	3,336,852	$	1,165,378

In September 2015, we amended and restated our primary line of credit, which is a five-year, unsecured revolving credit facility to, among other things, provide for a committed amount of $3.0 billion that expires in September 2020. The outstanding balance on this facility was $950.0 million as of May 31, 2016; and there was no outstanding balance on the predecessor facility as of August 31, 2015.

In December 2015, we entered into three bilateral, uncommitted revolving credit facilities with an aggregate capacity of $1.3 billion. Amounts borrowed under these short-term lines are used to fund our working capital and bear interest at base rates (or London Interbank Offered Rates ("LIBOR")) plus applicable margins ranging from 0.25% to 1.00%. As of May 31, 2016, outstanding borrowings under these facilities were $858.5 million.

Long-Term Debt

In September 2015, we entered into a ten-year term loan with a syndication of lenders. The agreement provides for committed term loans in an amount up to $600.0 million. Amounts drawn under this agreement that are subsequently repaid or prepaid may not be reborrowed. Principal on the term loans is payable in full on September 4, 2025. Borrowings under the agreement bear interest at a base rate (or LIBOR) plus an applicable margin, or at a fixed rate of interest determined and quoted by the administrative agent under the agreement in its sole and absolute discretion from time to time. The applicable margin is based on our leverage ratio and ranges between 1.50% and 2.00% for LIBOR loans and between 0.50% and 1.00% for base rate loans. As of May 31, 2016, outstanding borrowings under this agreement were $600.0 million.

In June 2016, we amended the ten-year term loan so that $300.0 million of the $600.0 million loan balance possesses a revolving feature, whereby we can pay down and re-advance an amount up to the referenced $300.0 million. The revolving feature matures on September 1, 2017, and the total funded loan balance on that day reverts to a non-revolving term loan. No other material changes were made to the original terms and conditions of the ten-year term loan.

In January 2016, we consummated a private placement of long-term notes in the aggregate principal amount of $680.0 million with certain accredited investors, which long-term notes are layered into six series. The first series of $152.0 million has an interest rate of 4.39% and is due in January 2023. The second series of $150.0 million has an interest rate of 4.58% and is due in January 2025. The third series of $58.0 million has an interest rate of 4.69% and is due in January 2027. The fourth series of $95.0 million has an interest rate of 4.74% and is due in January 2028. The fifth series of $100.0 million has an interest rate of 4.89% and is due in January 2031. The sixth series of $125.0 million has an interest rate of 5.40% and is due in January 2036.

Interest

The following table presents the components of interest expense, net for the three and nine months ended May 31, 2016, and 2015. We have revised prior period amounts in this table to include interest expense related to capital lease obligations that were previously accounted for as operating leases. See Note 13, Correction of Immaterial Errors for more information on the nature and amounts of these revisions.



	For the Three Months Ended May 31,						For the Nine Months Ended May 31,
	2016			2015			2016			2015
	(Dollars in thousands)
Interest expense	$	43,979		$	25,588		$	98,886		$	68,784
Interest-purchase of CHS McPherson noncontrolling interests	—			4,844			—			23,772
Capitalized interest	(6,513		)	(17,104		)	(27,333		)	(41,715		)
Interest income	(10,774		)	(2,548		)	(22,155		)	(7,384		)
Interest expense, net	$	26,692		$	10,780		$	49,398		$	43,457