Quarterly report pursuant to Section 13 or 15(d)

Borrowings

v3.22.2
Borrowings
 3 Months Ended
May 31, 2022
Debt Disclosure [Abstract]  
BORROWINGS BORROWINGS
Borrowings consist of the following:
May 31, 2022 February 28,
2022
Current Long-term Total Total
(in millions)
Short-term borrowings
Commercial paper $ 124.0  $ 323.0 
$ 124.0  $ 323.0 
Long-term debt
Term loan credit facilities $ —  $ 300.0  $ 300.0  $ 300.0 
Senior notes 567.4  9,965.7  10,533.1  9,773.6 
Other 7.7  12.5  20.2  19.9 
$ 575.1  $ 10,278.2  $ 10,853.3  $ 10,093.5 
Bank facilities
Senior credit facility
In April 2022, the Company, CB International, the Administrative Agent, and certain other lenders entered into the 2022 Restatement Agreement that amended and restated our then-existing senior credit facility (as amended and restated by the 2022 Restatement Agreement, the 2022 Credit Agreement). The principal changes effected by the 2022 Restatement Agreement were:

•The refinance and increase of the existing revolving credit facility from $2.0 billion to $2.25 billion and extension of its maturity to April 14, 2027;
•The refinement of certain negative covenants; and
•The replacement of LIBOR rates with rates based on term SOFR.

Term credit agreement
In April 2022, the Company, the Administrative Agent, and the Lender amended the June 2021 Term Credit Agreement (as amended, the 2022 Term Credit Agreement). The principal changes effected by the amendment were the refinement of certain negative covenants and replacement of LIBOR rates with rates based on term SOFR.

As of May 31, 2022, aggregate credit facilities under the 2022 Credit Agreement and the 2022 Term Credit Agreement consist of the following:
Amount Maturity
(in millions)
2022 Credit Agreement
Revolving credit facility (1) (2)
$ 2,250.0  Apr 14, 2027
2022 Term Credit Agreement
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 SOFR plus a margin and a credit spread adjustment, or the base rate plus a margin, or, in certain circumstances where SOFR cannot be adequately ascertained or available, an alternative benchmark rate plus a margin.
(2)We and/or CB International are the borrower under the $2,250.0 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 Five-Year Term Facility.

As of May 31, 2022, information with respect to borrowings under the 2022 Credit Agreement and the 2022 Term Credit Agreement is as follows:
Outstanding
borrowings		 Interest
rate		 SOFR
margin		 Outstanding
letters of
credit
Remaining
borrowing
capacity (1)
(in millions)
2022 Credit Agreement
Revolving credit facility $ —  —  % —  % $ 12.0  $ 2,114.0 
2022 Term Credit Agreement
Five-Year Term Facility $ 300.0  1.7  % 0.88  %
(1)Net of outstanding revolving credit facility borrowings and outstanding letters of credit under the 2022 Credit Agreement and outstanding borrowings under our commercial paper program of $124.0 million (excluding unamortized discount) (see “Commercial paper program” below).
We and our subsidiaries are subject to covenants that are contained in the 2022 Credit Agreement and the 2022 Term Credit Agreement, including those restricting the incurrence of additional subsidiary 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 2022 Credit Agreement. Accordingly, outstanding borrowings under our commercial paper program reduce the amount available under our revolving credit facility. As of May 31, 2022, we had $124.0 million of outstanding borrowings, net of unamortized discount, under our commercial paper program with a weighted average annual interest rate of 1.3% and a weighted average remaining term of five days.

Pre-issuance hedge contracts
In connection with the May 2022 Senior Notes, we entered into Pre-issuance hedge contracts, which were designated as cash flow hedges. As a result of these agreements, we hedged the treasury rate volatility on $300.0 million of future debt issuances. In May 2022, we terminated and settled all outstanding Pre-issuance hedge contracts, and recognized an unrealized gain, net of income tax effect, of $15.3 million in AOCI within our consolidated balance sheets. The gain on Pre-issuance hedge contracts is being amortized over 10 years to interest expense within our consolidated results of operations. See “Senior notes” below.

Senior notes
In May 2022, we issued $1,850.0 million aggregate principal amount of senior notes. Proceeds from this offering, net of discount and debt issuance costs, were $1,837.5 million. The May 2022 Senior Notes consist of:
Date of Redemption
Principal Maturity Interest Payments Stated Redemption Date Stated Basis Points
(in millions, except basis points)
3.60% Senior Notes (1)
$ 550.0  May 2024 May/Nov
(2)
 15
4.35% Senior Notes (1) (3)
$ 600.0  May 2027 May/Nov Apr 2027 25
4.75% Senior Notes (1) (3)
$ 700.0  May 2032 May/Nov Feb 2032 30
(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 at a redemption price 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 applicable treasury rate plus the stated basis points.
(3)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 price 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 applicable 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 February 2018, we issued $600.0 million aggregate principal amount of 3.20% senior notes due February 2023. In May 2013, we issued $1,050.0 million aggregate principal amount of 4.25% senior notes due May 2023. In May 2022, we used a portion of the proceeds from the May 2022 Senior Notes to complete a series of cash tender offers to purchase the 3.20% February 2018 Senior Notes and the 4.25% May 2013 Senior Notes validly tendered pursuant to the tender offers. We settled the tender offers with holders of approximately 67%
and 65% of the total outstanding principal amount of the 3.20% February 2018 Senior Notes and the 4.25% May 2013 Senior Notes, respectively. Total cash consideration paid for these purchases was $1,096.0 million and the total carrying amount of the notes was $1,080.7 million, resulting in a loss on extinguishment of debt of $15.3 million (including an immaterial amount of fees and other costs associated with the tender offers), which is included within our consolidated results. In addition, we paid any accrued interest on the tendered notes up to, but not including the date of settlement. In June 2022, we redeemed the remaining $198.2 million and $369.8 million outstanding principal balance of the 3.20% February 2018 Senior Notes and the 4.25% May 2013 Senior Notes, respectively. Total cash consideration paid was $575.5 million, which included the remaining principal amount of the notes of $568.0 million and a make-whole premium of $7.5 million which will be included in loss on extinguishment of debt within our consolidated results. See “Debt payments” below.

Debt payments
As of May 31, 2022, the required principal repayments under long-term debt obligations (excluding unamortized debt issuance costs and unamortized discounts of $63.6 million and $21.3 million, respectively) for the remaining nine months of Fiscal 2023 and for each of the five succeeding fiscal years and thereafter are as follows:
(in millions)
Fiscal 2023 (1)
$ 574.1 
Fiscal 2024 7.0 
Fiscal 2025 1,254.0 
Fiscal 2026 902.1 
Fiscal 2027 600.9 
Fiscal 2028 1,800.0 
Thereafter 5,800.1 
$ 10,938.2 
(1)Includes $568.0 million remaining principal amount of the 3.20% February 2018 Senior Notes and 4.25% May 2013 Senior Notes, fully redeemed in June 2022.