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 August 31, 2018.

Notes Payable

Notes payable as of August 31, 2018, and 2017, consisted of the following:



	Weighted-average Interest Rate
	2018	(As Restated) 2017	2018		(As Restated) 2017
			(Dollars in thousands)
Notes payable	3.50%	2.40%	$	1,437,264	$	1,695,423
CHS Capital notes payable	2.82%	1.90%	834,932		289,740
Total notes payable			$	2,272,196	$	1,985,163

Our primary committed line of credit is a five-year, unsecured revolving credit facility with a syndication of domestic and international banks.

We maintain a series of uncommitted bilateral facilities that are renewed annually. Amounts borrowed under these short-term credit facilities are used to fund our working capital. The following table summarizes our primary lines of credit as of August 31, 2018, and 2017:



Primary Revolving Credit Facilities	Fiscal Year of Maturity	Total Capacity		Borrowings Outstanding		Interest Rates
		2018		2018	2017
		(Dollars in thousands)
Committed Five-Year Unsecured Facility	2021	$	3,000,000	$—	$480,000	LIBOR or Base Rate +0.00% to 1.45%
Uncommitted Bilateral Facilities	2019	515,000		515,000	350,000	LIBOR or Base Rate +0.00% to 1.20%

In addition to our primary revolving lines of credit, we have a three-year $315.0 million committed revolving pre-export credit facility for CHS Agronegocio Industria e Comercio Ltda ("CHS Agronegocio"), our wholly-owned subsidiary, to provide financing for its working capital needs arising from its purchases and sales of grains, fertilizers and other agricultural products which expires in April 2020. As of August 31, 2018, the outstanding balance under the facility was $181.1 million.

As of August 31, 2018, our wholly-owned subsidiaries, CHS Europe S.a.r.l. and CHS Agronegocio, had uncommitted lines of credit with $454.1 million outstanding. In addition, our other international subsidiaries had lines of credit with a total of $279.4 million outstanding as of August 31, 2018, of which $40.5 million was collateralized.

Miscellaneous short-term notes payable totaled $7.4 million as of August 31, 2018.

CHS Capital Notes Payable

On June 28, 2018, we amended our Securitization Facility with the Purchasers. Under the Securitization Facility, we and certain of our subsidiaries sell Receivables to Cofina, a wholly-owned bankruptcy-remote indirect subsidiary of CHS. Cofina in turn transfers the purchased Receivables to the Purchasers. During the period from July 2017 through the amendment of the Securitization Facility in June 2018, CHS accounted for Receivables sold under the Securitization Facility as a sale of financial assets pursuant to ASC 860, Transfers and Servicing, and the Receivables sold were derecognized from its Consolidated Balance Sheets. Under the terms of the amended Securitization Facility, the transfer of Receivables is accounted for as a secured borrowing. We use the proceeds from the sale of Receivables under the Securitization Facility for general corporate purposes. The Securitization Facility terminates on June 17, 2019, but may be extended. See Note 3, Receivables for additional information.

CHS Capital has available credit under master participation agreements with several counterparties. Borrowings under these agreements are accounted for as secured borrowings and bear interest at variable rates ranging from 2.22% to 3.72% as of August 31, 2018. As of August 31, 2018, the total funding commitment under these agreements was $36.0 million, of which $6.3 million was borrowed.

CHS Capital sells loan commitments it has originated to ProPartners Financial on a recourse basis. The total outstanding commitments under the program totaled $180.9 million as of August 31, 2018, of which $98.3 million was borrowed under these commitments with an interest rate of 3.22%.

CHS Capital borrows funds under short-term notes issued as part of a surplus funds program. Borrowings under this program are unsecured and bear interest at variable rates ranging from 0.10% to 1.40% as of August 31, 2018, and are due upon demand. Borrowings under these notes totaled $69.3 million as of August 31, 2018.

Long-Term Debt

During the year ended August 31, 2018, we repaid approximately $208 million of long-term debt consisting of scheduled debt maturities and optional prepayments. There were no new material borrowings of long-term debt during fiscal 2018. Amounts included in long-term debt on our Consolidated Balance Sheets as of August 31, 2018, and 2017, are presented in the table below.



	2018			2017
	(Dollars in thousands)
6.18% unsecured notes $400 million face amount, due in equal installments beginning in 2014 through 2018	$	—		$	80,000
5.60% unsecured notes $60 million face amount, due in equal installments beginning in 2012 through 2018	—			4,615
5.78% unsecured notes $50 million face amount, due in equal installments beginning in 2014 through 2018	—			10,000
4.00% unsecured notes $100 million face amount, due in equal installments beginning in 2017 through 2021	60,000			80,000
4.08% unsecured notes $130 million face amount, due in 2019 ^(a)	129,229			130,690
4.52% unsecured notes $160 million face amount, due in 2021 ^(a)	157,528			163,496
4.67% unsecured notes $130 million face amount, due in 2023 ^(a)	128,577			135,792
4.39% unsecured notes $152 million face amount, due in 2023	152,000			152,000
3.85% unsecured notes $80 million face amount, due in 2025	80,000			80,000
3.80% unsecured notes $100 million face amount, due in 2025	100,000			100,000
4.58% unsecured notes $150 million face amount, due in 2025	145,213			149,293
4.82% unsecured notes $80 million face amount, due in 2026	80,000			80,000
4.69% unsecured notes $58 million face amount, due in 2027	58,000			58,000
4.74% unsecured notes $95 million face amount, due in 2028	95,000			95,000
4.89% unsecured notes $100 million face amount, due in 2031	100,000			100,000
4.71% unsecured notes $100 million face amount, due in 2033	100,000			100,000
5.40% unsecured notes $125 million face amount, due in 2036	125,000			125,000
Private Placement debt	1,510,547			1,643,886
5.59% unsecured term loans from cooperative and other banks, due in equal installments beginning in 2013 through 2018	—			15,000
2.25% unsecured term loans from cooperative and other banks, due in 2025^(b)	366,000			430,000
Bank financing	366,000			445,000
Capital lease obligations	25,280			33,075
Other notes and contracts with interest rates from 1.30% to 15.25%	32,607			62,652
Deferred financing costs	(4,179		)	(4,820		)
Total long-term debt	1,930,255			2,179,793
Less current portion	167,565			156,345
Long-term portion	$	1,762,690		$	2,023,448

_______________________________________


^(a)	We have entered into interest rate swaps designated as fair value hedging relationships with these notes. Changes in the fair value of the swaps are recorded each period with a corresponding adjustment to the carrying value of the debt. See Note 13, Derivative Financial Instruments and Hedging Activities for more information.


^(b)	Borrowings are variable under the agreement and bear interest at a base rate (or a LIBO rate) plus an applicable margin.

As of August 31, 2018, the carrying value of our long-term debt approximated its fair value, which is estimated to be $1.8 billion based on quoted market prices of similar debt (a Level 2 fair value measurement based on the classification hierarchy of ASC Topic 820, Fair Value Measurement). We have outstanding interest rate swaps designated as fair value hedges of select portions of our fixed-rate debt. During fiscal 2018, we recorded corresponding fair value adjustments of $18.7 million, which are included in the amounts in the table above. See Note 13, Derivative Financial Instruments and Hedging Activities for additional information.

In September 2015, we entered into a 10-year term loan with a syndication of banks. The agreement provides for committed term loans in an amount up to $600.0 million. As of August 31, 2018, $236.0 million was outstanding under this agreement. In June 2016, we amended the 10-year term loan so that $300.0 million of the $600.0 million loan balance possessed a revolving feature, whereby we were able to pay down and re-advance an amount up to the referenced $300.0 million. During fiscal 2017, we re-advanced $130.0 million under the revolving provision of the loan. As of August 31, 2018, $130.0 million was outstanding under this agreement. Principal on the outstanding balances is payable in full in September 2025.

Long-term debt outstanding as of August 31, 2018, has aggregate maturities, excluding fair value adjustments and capital leases (see Note 6, Property, Plant and Equipment for a schedule of minimum future lease payments under capital leases), as follows:



	(Dollars in thousands)
2019	$	162,846
2020	30,671
2021	182,472
2022	65
2023	282,065
Thereafter	1,260,570
Total	$	1,918,689

Interest expense for the years ended August 31, 2018, 2017, and 2016, was $149.2 million, $171.2 million and $113.7 million, respectively, net of capitalized interest of $6.7 million, $6.9 million and $30.3 million, respectively.