NOTE 8 — CREDIT ARRANGEMENTS

During the second quarter of 2012, the Company entered into a third amended and restated credit agreement which reduced the revolving credit facility from $400 million to $300 million and extended the maturity date to December 27, 2016. The maximum facility can be increased to $400 million with the consent of all parties. The program’s capacity is reduced by outstanding stand-by letters of credit which totaled $26.6 million at May 31, 2012. Under the credit facility, the Company is required to maintain a minimum interest coverage ratio of not less than 2.50 to 1.00 for the twelve month cumulative period ended May 31, 2012 and for each fiscal quarter on a rolling twelve month basis through August 31, 2012 and 3.00 to 1.00 for the twelve month cumulative period ending November 30, 2012 and for each fiscal quarter on a rolling twelve month cumulative period thereafter. At May 31, 2012, the Company’s interest coverage ratio was 4.59 to 1.00. The agreement also requires the Company to maintain a debt to capitalization ratio not greater than 0.60 to 1.00. At May 31, 2012, the Company’s debt to capitalization ratio was 0.52 to 1.00. The agreement provides for interest based on the LIBOR, the Eurodollar rate or the Bank of America’s prime rate. The Company had no borrowings outstanding on the revolving credit facility at May 31, 2012 or August 31, 2011.

The Company has numerous uncommitted credit facilities available from domestic and international banks. These credit facilities are used, in general, to support import letters of credit (including accounts payable settled under bankers’ acceptances), foreign exchange transactions and short-term advances which are priced at market rates.

Long-term debt, including the deferred gain from the termination of the interest rate swaps, was as follows:



(in thousands)	Weighted Average Interest Rate at May 31, 2012		May 31, 2012		August 31, 2011
5.625% notes due November 2013	3.5	%	$	205,882	$	207,752
6.50% notes due July 2017	5.7	%	415,234		414,198
7.35% notes due August 2018	6.4	%	528,710		526,699
Other, including equipment notes			14,515		10,632
CMCZ term note			—		48,648
CMCS financing agreement			—		18,476
			1,164,341		1,226,405
Less current maturities			4,090		58,908
			$	1,160,251	$	1,167,497

Interest on the notes is payable semiannually.

During the third quarter of 2011, the Company entered into an interest rate swap transaction to hedge the fair value changes on its 6.50% notes due July 2017 (“2017 Notes”). During the third quarter of 2010, the Company entered into interest rate swap transactions on its 5.625% notes due November 2013 (“2013 Notes”) and 7.35% notes due August 2018 (“2018 Notes”). The swap transactions were designated as fair value hedges at inception and effectively convert all fixed-rate interest to floating rate interest on the Company’s 2013 Notes, and effectively convert fixed-rate interest to floating rate interest with respect to $300 million in principal amount on each of the 2017 Notes and the 2018 Notes. During the third quarter of 2012, the Company terminated its existing interest rate swap transactions and received cash proceeds of approximately $53 million, net of customary finance charges. The resulting gain is being deferred and amortized as a reduction to interest expense over the remaining term of the respective debt tranches. At May 31, 2012, the unamortized portion was $49.8 million and the amortization of the deferred gain was $2.9 million for the three months ended May 31, 2012.

The CMCS financing agreement was used for capital expenditures and other uses. The note had scheduled principal and interest payments in semiannual installments and was repaid during the third quarter of 2012.

The CMC Zawiercie (“CMCZ”) term note was repaid during the first quarter of 2012. Subsequently, CMCZ entered into current uncommitted credit facilities of $71.9 million with several banks, which expire in the first quarter of 2013. At May 31, 2012, $37.0 million was outstanding under these facilities and included in notes payable on the consolidated balance sheets. The weighted average interest rate on these facilities was approximately 6.1% at May 31, 2012.

Interest of $39.8 million and $32.6 million was paid during the nine months ended May 31, 2012 and 2011, respectively. The Company had no material amounts of interest capitalized in the cost of property, plant and equipment during the periods presented.