CREDIT ARRANGEMENTS

12 Months Ended

Aug. 31, 2021

NOTE 8. CREDIT ARRANGEMENTS

Long-term debt was as follows:


	Weighted Average Interest Rate as of August 31, 2021	Year Ended August 31,
(in thousands)		2021		2020
2031 Notes	3.875%	$	300,000	$	—
2027 Notes	5.375%	300,000		300,000
2026 Notes	5.750%	—		350,000
2023 Notes	4.875%	330,000		330,000
Poland Term Loan	1.710%	49,726		40,713


Short-term borrowings	1.050%	26,560		—
Other	5.100%	19,492		21,329
Finance leases		52,144		50,224
Total debt		1,077,922		1,092,266
Less debt issuance costs		8,141		8,581
Total amounts outstanding		1,069,781		1,083,685
Less current maturities of long-term debt and short-term borrowings		54,366		18,149
Long-term debt		$	1,015,415	$	1,065,536

In February 2021, the Company issued $300.0 million of 3.875% Senior Notes due February 2031 (the "2031 Notes"). Issuance costs associated with the 2031 Notes were $4.9 million in 2021. Interest on 2031 Notes is payable semiannually.

In May 2018, the Company issued $350.0 million of 5.750% Senior Notes due April 2026 (the "2026 Notes"). In February 2021, the Company accepted for purchase $77.8 million of the outstanding principal amount of the 2026 Notes through a cash

tender offer. Following the expiration of the cash tender offer on February 18, 2021, the Company redeemed the remaining outstanding principal amount of the 2026 Notes. In 2021, the Company recognized a $16.8 million loss on debt extinguishment related to the retirement of the 2026 Notes.

In July 2017, the Company issued $300.0 million of 5.375% Senior Notes due July 2027 (the "2027 Notes"). Interest on the 2027 Notes is payable semiannually.

In May 2013, the Company issued $330.0 million of 4.875% Senior Notes due May 2023 (the "2023 Notes"). Interest on the 2023 Notes is payable semiannually.

In March 2021, the Company entered into a Fifth Amended and Restated Credit Agreement (as amended, the "Credit Agreement") with a revolving credit facility (the "Revolver") of $400.0 million and a maturity date in March 2026, replacing the Fourth Amended and Restated Credit Agreement with a revolving credit facility of $350.0 million and a maturity date in June 2022. The maximum availability under the Revolver can be increased to $650.0 million with bank approval. The Company's obligations under the Credit Agreement are collateralized by its North America inventory. The Credit Agreement's capacity includes a $50.0 million sub-limit for the issuance of stand-by letters of credit. The Company had no amounts drawn under the Revolver or the previous revolving credit facility at August 31, 2021 or 2020. The availability under the Revolver and the previous revolving credit facility was reduced by outstanding stand-by letters of credit of $3.0 million at August 31, 2021 and 2020.

Under the Credit Agreement, the Company is required to comply with certain financial and non-financial covenants, including covenants to maintain: (i) an interest coverage ratio (consolidated EBITDA to consolidated interest expense, as each is defined in the Credit Agreement) of not less than 2.50 to 1.00 and (ii) a debt to capitalization ratio (consolidated funded debt to total capitalization, as each is defined in the Credit Agreement) that does not exceed 0.60 to 1.00. Loans under the Credit Agreement bear interest based on the Eurocurrency rate, a base rate, or the LIBOR rate. At August 31, 2021, the Company's interest coverage ratio was 14.61 to 1.00 and the Company's debt to capitalization ratio was 0.31 to 1.00.

In August 2020, the Company entered into an agreement through its subsidiary, CMCP, which allowed for a delayed draw Term Loan facility (the "Poland Term Loan") in the maximum aggregate principal amount of up to PLN 250.0 million. The proceeds of the Poland Term Loan were used to finance an addition of a third rolling line in Poland, which was completed during 2021. At August 31, 2020, PLN 150.0 million, or $40.7 million, was outstanding. An incremental principal amount of PLN 50.0 million, or $13.7 million, was drawn in March 2021, resulting in a final maximum aggregate principal amount under the facility, PLN 190.5 million, or $49.7 million, outstanding, as of August 31, 2021. CMCP is required to make quarterly interest and principal payments on the Poland Term Loan with interest based on the Warsaw Interbank Offer Rate ("WIBOR") plus a margin. The Poland Term Loan has a maturity date of August 2026.

The Company also has credit facilities in Poland, through its subsidiary, CMCP, available to support working capital, short-term cash needs, letters of credit, financial assurance and other trade finance-related matters. During the third and fourth quarters of 2021, CMCP amended certain terms of its credit facilities in Poland increasing the total credit facilities from PLN 275.0 million, or $74.6 million, at August 31, 2020, to PLN 300.0 million, or $78.3 million as of August 31, 2021. Prior to the amendments, the credit facilities expired in March 2022. The amended credit facilities expire in March 2024 and August 2024 for PLN 250.0 million and PLN 50.0 million, respectively. At August 31, 2021 and 2020, no amounts were outstanding under these facilities. CMCP had no borrowings or repayments under its credit facilities in 2021, and $22.4 million borrowings and $22.4 million repayments under its credit facilities in 2020. The available balance of these credit facilities was reduced by outstanding stand-by letters of credit, guarantees and/or other financial assurance instruments, which totaled $5.7 million and $0.8 million at August 31, 2021 and 2020, respectively.

At August 31, 2021, the Company was in compliance with all of the covenants contained in its credit arrangements.

The scheduled maturities of the Company's long-term debt, excluding obligations related to finance leases, are included in the table below. See Note 7, Leases, for scheduled maturities of finance leases.


Year Ended August 31,	(in thousands)
2022	$	38,327
2023	345,070
2024	17,211
2025	15,062
2026	1,789
Thereafter	608,319
Total long-term debt, excluding finance leases	1,025,778
Less debt issuance costs	8,141
Total long-term debt outstanding, excluding finance leases	$	1,017,637

The Company capitalized $2.8 million, $2.5 million and $0.3 million of interest in the cost of property, plant and equipment during 2021, 2020 and 2019, respectively.

Accounts Receivable Facilities

In April 2021, the Company amended certain terms of the U.S. trade accounts receivable facility (the "U.S. Facility"), reducing the maximum facility from $200.0 million as of August 31, 2020, to $150.0 million, and extending the expiration date from November 2021 to March 2023. Under the U.S. Facility, CMC contributes, and certain of its subsidiaries transfer without recourse, certain eligible trade accounts receivable to CMC Receivables, Inc. ("CMCRV"), a wholly-owned subsidiary of CMC. CMCRV is structured to be a bankruptcy-remote entity formed for the sole purpose of facilitating transfers of trade accounts receivable generated by the Company. CMCRV transfers the trade accounts receivable in their entirety to two financial institutions. Under the U.S. Facility, with the consent of both CMCRV and the program's administrative agent, the amount advanced by the financial institutions can be increased to a maximum of $300.0 million for all trade accounts receivable. The remaining portion of the purchase price of the trade accounts receivable takes the form of subordinated notes from the respective financial institutions. These notes will be satisfied from the ultimate collection of the trade accounts receivable after payment of certain fees and other costs. The U.S. Facility contains certain cross-default provisions whereby a termination event could occur if the Company defaulted under certain of its credit arrangements. The covenants contained in the receivables purchase agreement are consistent with the Credit Agreement. Advances taken under the U.S. Facility incur interest based on LIBOR plus a margin. The Company had no advance payments outstanding under the U.S. Facility at August 31, 2021 and 2020.

In addition to the U.S. Facility, the Company's subsidiary in Poland transfers trade accounts receivable to financial institutions without recourse (the "Poland Facility"). In August 2021, the Company amended certain terms of its Poland Facility, increasing the maximum allowable advance of eligible trade accounts receivable from PLN 198.0 million, or $53.7 million, as of August 31, 2020 to PLN 288.0 million, or $75.2 million, as of August 31, 2021. Advances taken under the Poland Program incur interest based on the WIBOR plus a margin. The Company had PLN 101.7 million, or $26.6 million, advance payments outstanding under the Poland Facility at August 31, 2021 and none at August 31, 2020.

The transfer of receivables under the U.S. and Poland Facilities do not qualify to be accounted for as sales. Therefore, any advances outstanding under these programs are recorded as debt on the Company's consolidated balance sheets.