In February 2021, we issued $500.0 million of 0.90% notes due February 15, 2026, with cash proceeds received of $495.7 million, net of discounts and underwriters' fees. Also in February 2021, we issued $500.0 million of 1.85% notes due February 15, 2031, with cash proceeds received of $492.8 million, net of discounts and underwriters' fees. Interest is payable semiannually on both of these notes in arrears in February and August of each year. The net proceeds from these issuances were used to pay down short-term borrowings, including a portion of the $1,443.0 million of commercial paper issued to finance our acquisitions of Cholula and FONA, and for general corporate purposes.

We use derivative financial instruments to enhance our ability to manage risk, including foreign currency, net investment and interest rate exposures, which exist as part of our ongoing business operations. We do not enter into contracts for trading purposes, nor are we a party to any leveraged derivative instrument, and all derivatives are designated as hedges. We are not a party to master netting arrangements, and we do not offset the fair value of derivative contracts with the same counterparty in our financial statement disclosures. The use of derivative financial instruments is monitored through regular communication with senior management and the use of written guidelines.

Foreign currency exchange risk. We are potentially exposed to foreign currency fluctuations affecting net investments in subsidiaries, transactions (both third-party and intercompany) and earnings denominated in foreign currencies. Management assesses foreign currency risk based on transactional cash flows and translational volatility and may enter into forward contract and currency swaps to reduce fluctuations in the long or short currency positions. Forward contracts are generally less than 18 months duration.

At May 31, 2021, we had foreign currency exchange contracts to purchase or sell $625.7 million of foreign currencies as compared to $383.8 million at November 30, 2020. All of these contracts were designated as hedges of anticipated purchases denominated in a foreign currency or hedges of foreign currency denominated assets or liabilities. All foreign currency exchange contracts outstanding at May 31, 2021 have durations of less than 18 months, including $248.1 million of notional contracts that have durations of less than one month and are used to hedge short-term cash flow funding.

Contracts which are designated as hedges of anticipated purchases denominated in a foreign currency (generally purchases of raw materials in U.S. dollars by operating units outside the U.S.) are considered cash flow hedges. The gains and losses on these contracts are deferred in accumulated other comprehensive loss until the hedged item is recognized in cost of goods sold, at which time the net amount deferred in accumulated other comprehensive loss is also recognized in cost of goods sold. Gains and losses from contracts that are designated as hedges of assets, liabilities or firm commitments are recognized through income, offsetting the change in fair value of the hedged item.

We also enter into fair value foreign currency exchange contracts to manage both exposure to currency fluctuations in certain intercompany loans between subsidiaries as well as currency exposure to third-party non-functional currency assets or liabilities. At May 31, 2021, the notional value of these contracts was $530.5 million. Any gains or losses recorded based on both the change in fair value of these contracts and the change in the currency component of the underlying loans are recognized in our consolidated income statement as other income, net.

We also utilize cross currency interest rate swap contracts that are designated as net investment hedges. As of May 31, 2021, we had cross currency interest rate swap contracts of (i) $250 million notional value to receive $250 million at three-month U.S. LIBOR plus 0.685% and pay £194.1 million at three-month GBP LIBOR plus 0.740% and (ii) £194.1 million notional value to receive £194.1 million at three-month GBP LIBOR plus 0.740% and pay €221.8 million at three-month Euro EURIBOR plus 0.808%. These cross currency interest rate swap contracts expire in August 2027. Any gains or losses on net investment hedges are included in foreign currency translation adjustments in accumulated other comprehensive loss.

Interest rate risk. We finance a portion of our operations with both fixed and variable rate debt instruments, principally commercial paper, notes and bank loans. We utilize interest rate swap agreements to minimize worldwide financing costs and to achieve a desired mix of variable and fixed rate debt.

As of May 31, 2021, we have outstanding interest rate swap contracts for a notional amount of $350 million. Those interest rate swap contracts include a $100 million notional value of interest rate swap contracts, where we receive interest at 3.25% and pay

a variable rate of interest based on three-month LIBOR plus 1.22%, which expire in November 2025, and are designated as fair value hedges of the changes in fair value of $100 million of the $250 million 3.25% medium-term notes due 2025. We also have $250 million notional interest rate swap contracts where we receive interest at 3.40% and pay a variable rate of interest based on three-month LIBOR plus 0.685%, which expire in August 2027, and are designated as fair value hedges of the changes in fair value of $250 million of the $750 million 3.40% term notes due 2027. Any realized gain or loss on these swap contracts was offset by a corresponding increase or decrease of the value of the hedged debt.

All derivatives are recognized at fair value in the balance sheet and recorded in either other current assets, other long-term assets, other accrued liabilities or other long-term liabilities, depending upon their nature and maturity. Hedge ineffectiveness was not material.

The following table discloses the notional amount and fair values of derivative instruments on our balance sheet (in millions):



As of May 31, 2021	Asset Derivatives					Liability Derivatives
	Balance sheet location	Notional amount		Fair value		Balance sheet location	Notional amount		Fair value
Interest rate contracts	Other current assets / Other long-term assets	$	350.0	$	30.8	Other accrued liabilities	$	—	$	—
Foreign exchange contracts	Other current assets	264.4		2.9		Other accrued liabilities	361.3		9.0
Cross currency contracts	Other current assets / Other long-term assets	270.7		2.8		Other long-term liabilities	275.6		25.1
Total				$	36.5				$	34.1

As of November 30, 2020	Asset Derivatives					Liability Derivatives
	Balance sheet location	Notional amount		Fair value		Balance sheet location	Notional amount		Fair value
Interest rate contracts	Other current assets / Other long-term assets	$	350.0	$	43.1	Other accrued liabilities	$	—	$	—
Foreign exchange contracts	Other current assets	27.5		1.4		Other accrued liabilities	356.3		8.2
Cross currency contracts	Other current assets / Other long-term assets	—		—		Other long-term liabilities	524.4		18.8
Total				$	44.5				$	27.0

The following tables disclose the impact of derivative instruments on our other comprehensive income ("OCI"), accumulated other comprehensive income (loss) ("AOCI") and our consolidated income statement for the three- and six-month periods ended May 31, 2021 and 2020 (in millions):


Fair Value Hedges

Derivative	Income statement location	Income (expense)
		Three months ended May 31, 2021		Three months ended May 31, 2020		Six months ended May 31, 2021		Six months ended May 31, 2020

Interest rate contracts	Interest expense	$	2.0	$	0.9	$	4.0	$	1.4


Three months ended May 31,	Income statement location	Gain (loss) recognized in income					Income statement location	Gain (loss) recognized in income
Derivative		2021		2020		Hedged item		2021		2020
Foreign exchange contracts	Other income, net	$	(3.8)	$	5.7	Intercompany loans	Other income, net	$	4.0	$	(6.2)


Six months ended May 31,	Income statement location	Gain (loss) recognized in income					Income statement location	Gain (loss) recognized in income
Derivative		2021		2020		Hedged item		2021		2020
Foreign exchange contracts	Other income, net	$	(5.9)	$	3.5	Intercompany loans	Other income, net	$	6.5	$	(4.2)


Cash Flow Hedges
Three months ended May 31,
Derivative	Gain (loss) recognized in OCI				Income statement location	Gain (loss) reclassified from AOCI
	2021		2020			2021		2020
Interest rate contracts	$	—	$	—	Interest expense	$	0.1	$	0.1
Foreign exchange contracts	(0.8)		2.3		Cost of goods sold	(0.6)		(0.3)
Total	$	(0.8)	$	2.3		$	(0.5)	$	(0.2)

Six months ended May 31,
Derivative	Gain (loss) recognized in OCI				Income statement location	Gain (loss) reclassified from AOCI
	2021		2020			2021		2020
Interest rate contracts	$	0.3	$	—	Interest expense	$	0.2	$	0.2
Foreign exchange contracts	(2.4)		2.9		Cost of goods sold	(0.3)		0.1
Total	$	(2.1)	$	2.9		$	(0.1)	$	0.3


Net Investment Hedges
Three months ended May 31,
Derivative	Gain (loss) recognized in OCI				Income statement location	Gain (loss) excluded from the assessment of hedge effectiveness
	2021		2020			2021		2020
Cross currency contracts	$	(1.5)	$	(3.5)	Interest expense	$	0.3	$	1.1

Six months ended May 31,
Derivative	Gain (loss) recognized in OCI				Income statement location	Gain (loss) excluded from the assessment of hedge effectiveness
	2021		2020			2021		2020
Cross currency contracts	$	(3.5)	$	(3.3)	Interest expense	$	0.7	$	2.4

For all net investment hedges, no amounts have been reclassified out of accumulated other comprehensive income (loss). The amounts noted in the tables above for OCI do not include any adjustments for the impact of deferred income taxes.