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, 2019.

Notes Payable

Notes payable as of August 31, 2019 and 2018, consisted of the following:



	Weighted-average Interest Rate
	2019	2018	2019		2018
			(Dollars in thousands)
Notes payable	3.36%	3.50%	$	1,330,550	$	1,437,264
CHS Capital notes payable	2.90%	2.82%	825,558		834,932
Total notes payable			$	2,156,108	$	2,272,196

On July 16, 2019, we amended and restated our primary line of credit, which is a five-year unsecured revolving credit facility with a syndicate of domestic and international banks. The credit facility provides a committed amount of $2.75 billion that expires on July 16, 2024.

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, 2019 and 2018:



Primary Revolving Credit Facilities	Fiscal Year of Maturity	Total Capacity		Borrowings Outstanding				Interest Rates
		2019		2019		2018
		(Dollars in thousands)
Committed five-year unsecured facility	2024	$	2,750,000	$	335,000	$	—	LIBOR or base rate +0.00% to 1.45%
Uncommitted bilateral facilities	2020	630,000		430,000		515,000		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 that expires in April 2020. As of August 31, 2019, no amounts were outstanding under the facility.

In addition to our uncommitted bilateral facilities above, our wholly-owned subsidiaries, CHS Europe S.a.r.l. and CHS Agronegocio, had uncommitted lines of credit with $342.7 million outstanding as of August 31, 2019. In addition, our other international subsidiaries had lines of credit with a total of $155.8 million outstanding as of August 31, 2019, of which $13.8 million was collateralized.

CHS Capital Notes Payable

We have a receivables and loans securitization facility ("Securitization Facility") with certain unaffiliated financial institutions ("Purchasers"). Under the Securitization Facility, we and certain of our subsidiaries ("Originators") sell trade accounts and notes receivable ("Receivables") to Cofina Funding, LLC ("Cofina"), a wholly-owned bankruptcy-remote indirect subsidiary of CHS. Cofina in turn transfers the Receivables to the Purchasers, which is accounted for as a secured borrowing. We use the proceeds from the sale of Receivables under the Securitization Facility for general corporate purposes and settlements are made on a monthly basis. The Securitization Facility was amended on June 27, 2019, to extend its termination date to June 26, 2020. The termination date may be extended.

During the period from July 2017 through an 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 our Consolidated Balance Sheets. The following table is a reconciliation of the beginning and ending balances of the Deferred Purchase Price ("DPP") receivable, including the long-term portion included in other assets, for the year ended August 31, 2018.



	2018
	(Dollars in thousands)
Balance - beginning of year	$	548,602
Cash collections on DPP receivable	(10,961		)
Transfer of receivables	(386,900		)
Monthly settlements, net	(169,827		)
Fair value adjustment	19,086
Balance - end of year	$	—

On September 4, 2018, we entered into a repurchase facility ("Repurchase Facility") related to the Securitization Facility. Under the Repurchase Facility, we are able to borrow up to $150.0 million, collateralized by a subordinated note issued by Cofina in favor of the Originators and representing a portion of the outstanding balance of the Receivables sold by the Originators to Cofina under the Securitization Facility. As of August 31, 2019, the outstanding balance under the Repurchase Facility was $150.0 million.

CHS Capital has available credit under a master participation agreement with one counterparty. Borrowings under this agreement are accounted for as secured borrowings and bear interest at 4.19% as of August 31, 2019. As of August 31, 2019, the total funding commitment under this agreement was $5.0 million, of which $2.3 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 were $65.8 million as of August 31, 2019, of which $42.3 million was borrowed under these commitments with an interest rate of 3.36%.

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 0.35% to 1.40% as of August 31, 2019, and are due upon demand. Borrowings under these notes totaled $63.8 million as of August 31, 2019.

Long-Term Debt

During the year ended August 31, 2019, we repaid approximately $153.6 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 2019. Amounts included in long-term debt on our Consolidated Balance Sheets as of August 31, 2019 and 2018, are presented in the table below.



	2019			2018
	(Dollars in thousands)
4.00% unsecured notes $100 million face amount, due in equal installments beginning in fiscal 2017 through fiscal 2021	$	40,000		$	60,000
4.08% unsecured notes $130 million face amount, due in fiscal 2019 ^(a)	—			129,229
4.52% unsecured notes $160 million face amount, due in fiscal 2021 ^(a)	161,978			157,528
4.67% unsecured notes $130 million face amount, due in fiscal 2023 ^(a)	136,086			128,577
4.39% unsecured notes $152 million face amount, due in fiscal 2023	152,000			152,000
3.85% unsecured notes $80 million face amount, due in fiscal 2025	80,000			80,000
3.80% unsecured notes $100 million face amount, due in fiscal 2025	100,000			100,000
4.58% unsecured notes $150 million face amount, due in fiscal 2025	151,776			145,213
4.82% unsecured notes $80 million face amount, due in fiscal 2026	80,000			80,000
4.69% unsecured notes $58 million face amount, due in fiscal 2027	58,000			58,000
4.74% unsecured notes $95 million face amount, due in fiscal 2028	95,000			95,000
4.89% unsecured notes $100 million face amount, due in fiscal 2031	100,000			100,000
4.71% unsecured notes $100 million face amount, due in fiscal 2033	100,000			100,000
5.40% unsecured notes $125 million face amount, due in fiscal 2036	125,000			125,000
Private Placement debt	1,379,840			1,510,547
2.25% unsecured term loans from cooperative and other banks, due in fiscal 2025^(b)	366,000			366,000
Bank financing	366,000			366,000
Capital lease obligations	28,239			25,280
Other notes and contracts with interest rates from 1.30% to 15.25%	18,601			32,607
Deferred financing costs	(3,569		)	(4,179		)
Total long-term debt	1,789,111			1,930,255
Less current portion	39,210			167,565
Long-term portion	$	1,749,901		$	1,762,690

(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 LIBOR) plus an applicable margin.

As of August 31, 2019, the carrying value of our long-term debt approximated its fair value, which is estimated to be $1.9 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 2019, we recorded corresponding fair value adjustments of $21.2 million, which are included in the amounts in the table above. See Note 13, Derivative Financial Instruments and Hedging Activities, for additional information.

We have a 10-year term loan with a syndicate of banks. The agreement provides for committed term loans in an amount up to $600.0 million. As of August 31, 2019, $236.0 million of term loans were outstanding under this agreement. The agreement includes a revolving feature, whereby we are able to pay down and re-advance an amount up to $300.0 million of the $600.0 million. During fiscal 2017, we re-advanced $130.0 million under the revolving provision of the loan. As of August 31, 2019, $130.0 million of revolving loans were outstanding under this agreement. Principal on the outstanding balances is payable in full in September 2025.

Long-term debt outstanding as of August 31, 2019, 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)
2020	$	32,812
2021	180,663
2022	66
2023	282,066
2024	2,620
Thereafter	1,256,525
Total	$	1,754,752

Interest expense for the years ended August 31, 2019, 2018 and 2017, was $167.1 million, $149.2 million and $171.2 million, respectively, net of capitalized interest of $9.4 million, $6.7 million and $6.9 million, respectively.