Quarterly report pursuant to Section 13 or 15(d)

Borrowings

v3.20.2
Borrowings
 3 Months Ended
May 31, 2020
Debt Disclosure [Abstract]  
BORROWINGS BORROWINGS
Borrowings consist of the following:
May 31, 2020 February 29,
2020
Current Long-term Total Total
(in millions)
Short-term borrowings
Commercial paper $ —    $ 238.9   
$ —    $ 238.9   
Long-term debt
Term loan credit facilities $ 24.6    $ 1,015.1    $ 1,039.7    $ 1,295.7   
Senior notes 499.4    10,612.9    11,112.3    10,624.7   
Other 10.7    11.3    22.0    25.3   
$ 534.7    $ 11,639.3    $ 12,174.0    $ 11,945.7   

Senior credit facility
In March 2020, the Company, CB International Finance S.à r.l., a wholly-owned subsidiary of ours (“CB International”), certain of the Company’s subsidiaries as guarantors, Bank of America, N.A., as administrative
agent (the “Administrative Agent”), and certain other lenders entered into a Restatement Agreement (the “2020 Restatement Agreement”) that amended and restated the 2018 Credit Agreement (as amended and restated by the 2020 Restatement Agreement, the “2020 Credit Agreement”). The 2020 Credit Agreement provides for an aggregate revolving credit facility of $2.0 billion. The principal changes effected by the 2020 Restatement Agreement were:

•the removal of the subsidiary guarantees and termination of the guarantee agreement;
•the inclusion of the parent guaranty provisions in connection with the termination of the guarantee agreement;
•the removal of certain provisions pertaining to term loans since no term loans are outstanding; and
•the revision of the LIBOR successor rate provisions to permit the use of rates based on the secured overnight financing rate (“SOFR”) administered by the Federal Reserve Bank of New York.

Upon removal of all subsidiary guarantors from our 2020 Credit Agreement, the subsidiary guarantors were automatically released from the indentures relating to our outstanding senior notes.

2020 Term Credit Agreement
In March 2020, the Company, certain of the Company’s subsidiaries as guarantors, the Administrative Agent, and certain other lenders entered into a term loan restatement agreement (the “Term Loan Restatement Agreement”) that amended and restated the Term Credit Agreement (as amended and restated by the Term Loan Restatement Agreement, the “2020 Term Credit Agreement”). The Term Credit Agreement provides for aggregate credit facilities of $1.5 billion, consisting of a $500.0 million three-year term loan facility (the “Three-Year Term Facility”) and a $1.0 billion five-year term loan facility (the “Five-Year Term Facility”). The principal changes effected by the Term Loan Restatement agreement were:

•the removal of the subsidiary guarantees and termination of the respective guarantee agreements; and
•the revision of the LIBOR successor rate provisions to permit the use of rates based on SOFR.

March 2020 Term Credit Agreement
In March 2020, the Company, certain of the Company’s subsidiaries as guarantors, Bank of America, N.A., as Administrative Agent and lender (“the Lender”) entered into a 2020 term loan restatement agreement (the “2020 Term Loan Restatement Agreement”) that amended and restated the 2019 Term Credit Agreement (as amended and restated by the 2020 Term Loan Restatement Agreement, the “March 2020 Term Credit Agreement”). The March 2020 Term Credit Agreement provides for a $491.3 million five-year term loan facility (the “2019 Five-Year Term Facility”). The principal changes effected by the 2020 Term Loan Restatement Agreement were:

•the removal of the subsidiary guarantees and termination of the respective guarantee agreements; and
•the revision of the LIBOR successor rate provisions to permit the use of rates based on SOFR.
As of May 31, 2020, aggregate credit facilities under the 2020 Credit Agreement, the 2020 Term Credit Agreement, and the March 2020 Term Credit Agreement consist of the following:

Amount Maturity
(in millions)
2020 Credit Agreement
Revolving Credit Facility (1) (2)
$ 2,000.0    Sept 14, 2023
2020 Term Credit Agreement
Three-Year Term Facility (1) (3)
$ 500.0    Nov 1, 2021
Five-Year Term Facility (1) (3)
1,000.0    Nov 1, 2023
$ 1,500.0   
March 2020 Term Credit Agreement
2019 Five-Year Term Facility (1) (3)
$ 491.3    Jun 28, 2024
(1)Contractual interest rate varies based on our debt rating (as defined in the respective agreement) and is a function of LIBOR plus a margin, or the base rate plus a margin, or, in certain circumstances where LIBOR cannot be adequately ascertained or available, an alternative benchmark rate plus a margin.
(2)We and/or CB International are the borrower under the $2,000.0 million Revolving Credit Facility. Includes a sub-facility for letters of credit of up to $200.0 million.
(3)We are the borrower under the Three-Year Term Facility, the Five-Year Term Facility, and the 2019 Five-Year Term Facility.

As of May 31, 2020, information with respect to borrowings under the 2020 Credit Agreement, the 2020 Term Credit Agreement, and the March 2020 Term Credit Agreement is as follows:
2020 Credit Agreement 2020 Term Credit
Agreement		 March 2020 Term Credit Agreement
Revolving
Credit
Facility
Three-Year
Term
Facility (1) (2)
Five-Year
Term
Facility (1) (2)
2019 Five-Year Term Facility (1)
(in millions)
Outstanding borrowings $ —    $ 249.8    $ 317.1    $ 472.8   
Interest rate —  % 1.5  % 1.6  % 1.2  %
LIBOR margin —  % 1.13  % 1.25  % 0.88  %
Outstanding letters of credit $ 11.8   
Remaining borrowing capacity (3)
$ 1,988.2   
(1)Outstanding term loan facilities borrowings are net of unamortized debt issuance costs.
(2)Outstanding borrowings reflect a $250.0 million and a $645.0 million partial prepayment of the Three-Year Term Facility and Five-Year Term Facility, respectively, under our 2020 Term Credit Agreement.
(3)Net of outstanding revolving credit facility borrowings, outstanding letters of credit under the 2020 Credit Agreement, and outstanding borrowings under our commercial paper program (excluding unamortized discount) (see “Commercial paper program”).

We and our subsidiaries are subject to covenants that are contained in the 2020 Credit Agreement, 2020 Term Credit Agreement, and the March 2020 Term Credit Agreement, including those restricting the incurrence of additional indebtedness, additional liens, mergers and consolidations, transactions with affiliates, and sale and leaseback transactions, in each case subject to numerous conditions, exceptions, and thresholds. The financial covenants are limited to a minimum interest coverage ratio and a maximum net leverage ratio.
Commercial paper program
We have a commercial paper program which provides for the issuance of up to an aggregate principal amount of $2.0 billion of commercial paper. Our commercial paper program is backed by unused commitments under our revolving credit facility under our 2020 Credit Agreement. Accordingly, outstanding borrowings under our commercial paper program reduce the amount available under our revolving credit facility under our 2020 Credit Agreement. As of May 31, 2020, we had no outstanding borrowings under our commercial paper program.

Interest rate swap contracts
We have outstanding interest rate swap agreements, which are designated as cash flow hedges for $375.0 million of our floating LIBOR rate debt. As a result of these hedges, we have fixed our interest rates on $375.0 million of our floating LIBOR rate debt at an average rate of 1.9% (exclusive of borrowing margins) from July 1, 2019, through July 1, 2020.

Treasury lock contracts
In February and March 2020, we entered into treasury lock agreements, which were designated as cash flow hedges. As a result of these hedges, we fixed our 10-year treasury rates on $500.0 million of future debt issuances at an average rate of 1.2% (exclusive of borrowing margins). In April 2020, we settled all outstanding treasury lock contracts, and recognized an unrealized loss, net of income tax effect, of $21.8 million in accumulated other comprehensive income (loss). This loss will be amortized to interest expense over 10-years. See “Senior Notes” below.

Senior notes
In April 2020, we issued $1,200.0 million aggregate principal amount of Senior Notes (the “April 2020 Senior Notes”). Proceeds from this offering, net of discount and debt issuance costs, were $1,183.4 million. The April 2020 Senior Notes consist of:
Date of Redemption
Principal Maturity Interest Payments Stated Redemption Rate Stated Basis Points
(in millions, except basis points)
2.875% Senior Notes (1) (2)
$ 600.0    May 2030 May/Nov Feb 2030 35   
3.75% Senior Notes (1) (2)
$ 600.0    May 2050 May/Nov Nov 2049 40   
(1)Senior unsecured obligations which rank equally in right of payment to all of our existing and future senior unsecured indebtedness.
(2)Redeemable, in whole or in part, at our option at any time prior to the stated redemption date as defined in the indenture, at a redemption rate equal to 100% of the outstanding principal amount, plus accrued and unpaid interest and a make-whole payment based on the present value of the future payments at the adjusted Treasury Rate plus the stated basis points as defined in the indenture. On or after the stated redemption date, redeemable, in whole or in part, at our option at any time at a redemption price equal to 100% of the outstanding principal amount, plus accrued and unpaid interest.

In November 2017, we issued $700.0 million aggregate principal amount of 2.25% Senior Notes due November 2020 (the “2.25% November 2017 Senior Notes”). On May 27, 2020, we repaid the 2.25% November 2017 Senior Notes with proceeds from the April 2020 Senior Notes. This note was redeemed prior to maturity at a redemption price equal to 100% of the outstanding principal amount, plus accrued and unpaid interest and a make-whole payment of $6.2 million. The make-whole payment is included in loss on extinguishment of debt within our consolidated results of operations.
Debt payments
As of May 31, 2020, the required principal repayments under long-term debt obligations (excluding unamortized debt issuance costs and unamortized discounts of $70.0 million and $18.3 million, respectively) for the remaining nine months of fiscal 2021 and for each of the five succeeding fiscal years and thereafter are as follows:

(in millions)
2021 $ 26.8   
2022 1,432.2   
2023 1,828.9   
2024 1,393.7   
2025 780.7   
2026 400.0   
Thereafter 6,400.0   
$ 12,262.3   

Subsequent event
2020 Term Credit Agreement
In July 2020, we prepaid the remaining outstanding borrowings of $317.5 million on our Five-Year Term Facility and made an additional $25.0 million partial prepayment on the Three-Year Term Facility, both under our 2020 Term Credit Agreement.