Note G – Debt and Receivables Securitization

The following table summarizes our long-term debt and short-term borrowings outstanding at May 31, 2018 and 2017:

(in thousands)	2018			2017
Short-term borrowings	$	-		$	123
4.30% senior notes due August 1, 2032		200,000			-
4.55% senior notes due April 15, 2026		250,000			250,000
4.60% senior notes due August 10, 2024		150,000			150,000
6.50% senior notes due April 15, 2020		150,000			150,000
Term loans		829			30,400
Other		3,899			668
Total debt		754,728			581,191
Unamortized discount and debt issuance costs		(4,360	)		(2,581	)
Total debt, net		750,368			578,610
Less: current maturities and short-term borrowings		1,474			6,814
Total long-term debt	$	748,894		$	571,796

Maturities on long-term debt in the next five fiscal years, and the remaining years thereafter, are as follows:

(in thousands)
2019	$	1,474
2020		151,111
2021		639
2022		656
2023		541
Thereafter		600,307
Total	$	754,728

Long-Term Debt

On September 26, 2014, Worthington Aritas executed a five-year term loan denominated in Euros, with interest at a variable rate based on EURIBOR. On October 15, 2014, we entered into an interest rate swap to fix the interest rate on 60% of the borrowings outstanding under this facility at 2.015% starting on December 26, 2014. Borrowings against the facility were used for the construction of a cryogenics manufacturing facility in Turkey. In anticipation of the planned sale of the Company’s cryogenics business in Turkey, the Company paid off this term loan and settled the derivative instrument for an immaterial loss during the fourth quarter of fiscal 2018.

On July 28, 2017, we issued $200,000,000 aggregate principal amount of senior unsecured notes due August 1, 2032 (the “2032 Notes”). The 2032 Notes bear interest at a rate of 4.300%. The 2032 Notes were sold to the public at 99.901% of the principal amount thereof, to yield 4.309% to maturity. We used a portion of the net proceeds from the offering to repay amounts then outstanding under our multi-year revolving credit facility and amounts then outstanding under our revolving trade accounts receivable securitization facility, both of which are described in more detail below. We entered into an interest rate swap in June 2017, in anticipation of the issuance of the 2032 Notes. The interest rate swap had a notional amount of $150,000,000 to hedge the risk of changes in the semi-annual interest rate payments attributable to changes in the benchmark interest rate during the several days leading up to the issuance of the 2032 Notes. Upon pricing of the 2032 Notes, the derivative instrument was settled resulting in a gain of approximately $3,098,000, which was reflected in AOCI. Approximately $2,116,000 and $198,000 were allocated to debt issuance costs and the debt discount, respectively. The debt issuance costs and the debt discount were recorded on the consolidated balance sheet within long-term debt as a contra-liability. Each will continue to be amortized, through interest expense, in our consolidated statements of earnings over the term of the 2032 Notes. The unamortized portion of the debt issuance costs and debt discount was $1,998,000 and $187,000, respectively, at May 31, 2018.

On April 15, 2014, we issued $250,000,000 aggregate principal amount of unsecured senior notes due on April 15, 2026 (the “2026 Notes”). The 2026 Notes bear interest at a rate of 4.55%. The 2026 Notes were sold to the public at 99.789% of the principal amount thereof, to yield 4.573% to maturity. We used a portion of the net proceeds from the offering to repay borrowings then outstanding under our revolving credit facilities. Approximately $3,081,000, $2,279,000 and $528,000 were allocated to the settlement of a derivative contract entered into in anticipation of the issuance of the 2026 Notes, debt issuance costs, and the debt discount, respectively. The debt issuance costs and debt discount were recorded on the consolidated balance sheets within long-term debt as a contra-liability, and the loss on the derivative contract recorded within AOCI. Each will continue to be amortized, through interest expense, in our consolidated statements of earnings over the term of the 2026 Notes. The unamortized portion of the debt issuance costs and debt discount was $1,488,000 and $344,000, respectively, at May 31, 2018 and $1,677,000 and $388,000, respectively at May 31, 2017.

On August 10, 2012, we issued $150,000,000 aggregate principal amount of unsecured senior notes due August 10, 2024 (the “2024 Notes”). The 2024 Notes bear interest at a rate of 4.60%. The net proceeds from this issuance were used to repay a portion of the then outstanding borrowings under our revolving credit facilities. Approximately $80,000 of the aggregate proceeds were allocated to debt issuance costs. The unamortized portion of the debt issuance costs was $41,000 and $48,000 at May 31, 2018 and 2017, respectively.

On April 27, 2012, we executed a $5,880,000 seven-year term loan that matures on May 1, 2019 and requires monthly payments of $76,350. The loan bears interest at a rate of 2.49% and is secured by an aircraft that was purchased with its proceeds. Borrowings outstanding totaled $829,000 and $1,713,000 as of May 31, 2018 and 2017, respectively.

On April 13, 2010, we issued $150,000,000 aggregate principal amount of unsecured senior notes due on April 15, 2020 (the “2020 Notes”). The 2020 Notes bear interest at a rate of 6.50%. The 2020 Notes were sold to the public at 99.890% of the principal amount thereof, to yield 6.515% to maturity. We used the net proceeds from the offering to repay a portion of the then outstanding borrowings under our revolving credit facilities. Approximately $1,358,000, $1,486,000 and $165,000 were allocated to the settlement of a derivative contract entered into in anticipation of the issuance of the 2020 Notes, debt issuance costs, and the debt discount. The debt discount and debt issuance costs were recorded on the consolidated balance sheets within long-term debt as a contra-liability, and the loss on the derivative contract within AOCI. Each will continue to be amortized, through interest expense, in our consolidated statements of earnings over the remaining term of the 2020 Notes. The unamortized portion of the debt issuance costs and debt discount was $272,000 and $30,000, respectively, at May 31, 2018 and $421,000 and $47,000, respectively at May 31, 2017.

Other Financing Arrangements

We maintain a $50,000,000 revolving trade accounts receivable securitization facility (the “AR Facility”). On January 16, 2018, the Company amended the terms of the AR Facility, extending the maturity by one year to January 2019 and reducing the borrowing capacity from $100,000,000 to $50,000,000. Pursuant to the terms of the AR Facility, certain of our subsidiaries sell their accounts receivable without recourse, on a revolving basis, to Worthington Receivables Corporation (“WRC”), a wholly-owned, consolidated, bankruptcy-remote subsidiary. In turn, WRC may sell without recourse, on a revolving basis, up to $50,000,000 of undivided ownership interests in this pool of accounts receivable to a third-party bank. We retain an undivided interest in this pool and are subject to risk of loss based on the collectability of the receivables from this retained interest. Because the amount eligible to be sold excludes receivables more than 90 days past due, receivables offset by an allowance for doubtful accounts due to bankruptcy or other cause, concentrations over certain limits with specific customers and certain reserve amounts, we believe additional risk of loss is minimal. As of May 31, 2018, no undivided ownership interests in this pool of accounts receivable had been sold. Facility fees of $383,000, $354,000, and $540,000 were recognized within interest expense during fiscal 2018, fiscal 2017 and fiscal 2016, respectively.

We also maintain a $500,000,000 multi-year revolving credit facility (the “Credit Facility”) with a group of lenders. On February 16, 2018, the Company amended the terms of the Credit Facility, extending the maturity by three years to February 2023. Debt issuance costs of $805,000 were incurred as a result of the renewal. These costs have been deferred and will be amortized over the life of the Credit Facility to interest expense. Borrowings under the Credit Facility have maturities of up to one year. We have the option to borrow at rates equal to an applicable margin over the LIBOR, Prime rate or Overnight Bank Funding rate. The applicable margin is determined by our credit rating. There were no borrowings outstanding under the Credit Facility at May 31, 2018. As discussed in “Note F – Guarantees,” we provided $14,493,000 in letters of credit for third-party beneficiaries as of May 31, 2018. While not drawn against at May 31, 2018, $13,245,000 of these letters of credit were issued against availability under the Credit Facility, leaving $486,755,000 available at May 31, 2018.