Long-Term Debt and Derivatives



(In thousands)	2015		2014

Unsecured term notes due through 2036 at an average rate of 4.6%	$	1,300,000	$	1,300,980
Less: amounts due within one year	—		503
	$	1,300,000	$	1,300,477

Cintas' senior notes are recorded at cost. The fair value of the senior notes is estimated using level 2 inputs based on general market prices. The carrying value and fair value of Cintas' long-term debt as of May 31, 2015 were $1,300.0 million and $1,418.6 million, respectively, and as of May 31, 2014 were $1,301.0 million and $1,421.0 million, respectively.

Letters of credit outstanding were $82.7 million and $85.1 million at May 31, 2015 and 2014, respectively. Maturities of long-term debt during each of the next five years are zero, $250.0 million, $300.0 million, zero and zero, respectively.

Interest paid was $65.3 million, $65.9 million and $68.4 million for the fiscal years ended May 31, 2015, 2014 and 2013, respectively.

Cintas' commercial paper program has a capacity of $300.0 million that is fully supported by a backup revolving credit facility through a credit agreement with its banking group. This revolving credit facility has an accordion feature that allows for a maximum borrowing capacity of $450.0 million. The revolving credit facility was amended on May 29, 2014, to extend the maturity date from October 6, 2016 to May 28, 2019, and to adjust the applicable margin used to calculate the interest payable on any outstanding loans and the facility fee payable under the agreement. No commercial paper or borrowings on our revolving credit facility were outstanding at May 31, 2015 or 2014.

Cintas used interest rate lock agreements to hedge against movements in the treasury rates at the time Cintas issued its senior notes in fiscal 2007, fiscal 2008, fiscal 2011 and fiscal 2013. The amortization of the cash flow hedges resulted in an increase to other comprehensive income of $2.0 million, $2.0 million and $2.0 million for the fiscal years ended May 31, 2015, 2014 and 2013, respectively.

To hedge the exposure of movements in the foreign currency rates, Cintas may use foreign currency hedges. These hedges reduce the impact on cash flows from movements in the foreign currency exchange rates. Examples of foreign currency hedge instruments that Cintas may use are average rate options and forward contracts. Cintas had foreign currency forward contracts included in current accrued liabilities of $0.3 million at May 31, 2014. These instruments did not impact foreign currency exchange during fiscal 2015, 2014 or 2013.

Cintas has certain covenants related to debt agreements. These covenants limit Cintas' ability to incur certain liens, to engage in sale-leaseback transactions and to merge, consolidate or sell all or substantially all of Cintas' assets. These covenants also require Cintas to maintain certain debt to EBITDA and interest coverage ratios. Cross-default provisions exist between certain debt instruments. Cintas is in compliance with all of the debt covenants for all periods presented. If a default of a significant covenant were to occur, the default could result in an acceleration of the maturity of the indebtedness, impair liquidity and limit the ability to raise future capital.