Debt and Derivatives

Cintas' debt is summarized as follows at May 31:



(In thousands)	Interest Rate			Fiscal Year Issued	Fiscal Year Maturity	2019			2018

Debt due within one year
Commercial paper	2.68	%	⁽¹⁾	2019	2020	$	112,500		$	—
Term loan	3.06	%	⁽¹⁾	2019	2020	200,000			—
Debt issuance costs						(236		)	—
Total debt due within one year						$	312,264		$	—

Debt due after one year
Senior notes	4.30	%		2012	2022	$	250,000		$	250,000
Senior notes	2.90	%		2017	2022	650,000			650,000
Senior notes	3.25	%		2013	2023	300,000			300,000
Senior notes ⁽²⁾	2.78	%		2013	2023	51,684			52,119
Senior notes ⁽³⁾	3.11	%		2015	2025	51,973			52,309
Senior notes	3.70	%		2017	2027	1,000,000			1,000,000
Senior notes	6.15	%		2007	2037	250,000			250,000
Debt issuance costs						(16,150		)	(19,119		)
Total debt due after one year						$	2,537,507		$	2,535,309


⁽¹⁾	Variable rate debt instrument. The rate presented is the variable borrowing rate at May 31, 2019.


⁽²⁾	Cintas assumed these senior notes with the acquisition of G&K in the fourth quarter of fiscal 2017, and they were recorded at fair value. The interest rate shown above is the effective interest rate. The principal amount of these notes is $50.0 million with a stated interest rate of 3.73%.


⁽³⁾	Cintas assumed these senior notes with the acquisition of G&K in the fourth quarter of fiscal 2017, and they were recorded at fair value. The interest rate shown above is the effective interest rate. The principal amount of these notes is $50.0 million with a stated interest rate of 3.88%.

The average interest rate for all Cintas debt at May 31, 2019 was 3.7% with maturity dates through fiscal year 2037. Cintas' senior notes, excluding the G&K senior notes assumed with the acquisition of G&K in fiscal 2017, and term loan are recorded at cost, net of debt issuance costs. The fair value of the long-term debt is estimated using Level 2 inputs based on general market prices. The carrying value and fair value of Cintas' debt as of May 31, 2019 were $2,866.2 million and $2,998.7 million, respectively, and as of May 31, 2018 were $2,550.0 million and $2,582.0 million, respectively. During the twelve months ended May 31, 2019, Cintas issued $112.5 million, net of commercial paper.

Letters of credit outstanding were $120.6 million and $143.0 million at May 31, 2019 and 2018, respectively. Maturities of debt during each of the next five years are $312.5 million, $0.0 million, $900.0 million, $350.0 million and $0.0 million, respectively.

Interest paid was $101.8 million, $122.1 million and $76.6 million for the fiscal years ended May 31, 2019, 2018 and 2017, respectively. Interest paid in fiscal 2017 included the payment of $17.1 million in short-term debt financing fees, which were related to the acquisition of G&K and are not reoccurring.

The credit agreement that supports our commercial paper program was amended and restated on May 24, 2019. The amendment increased the capacity of the revolving credit facility from $600.0 million to $1.0 billion and created a new term loan of $200.0 million. The credit agreement has an accordion feature that provides Cintas the ability to request increases to the borrowing commitments under either the revolving credit facility or the term loan of up to $250.0 million in the aggregate, subject to customary conditions. The maturity date of the revolving credit facility is May 22, 2024, and the maturity date of the term loan is May 22, 2020, which can be extended 12 months, annually, for up to four years. As of May 31, 2019, there was $112.5 million of commercial paper outstanding with a weighted average interest rate of 2.7% and maturity dates less than 30 days and no borrowings on our revolving credit facility. No commercial paper or borrowings on our revolving credit facility were outstanding at May 31, 2018. The fair value of the commercial paper, which approximates the carrying value, is estimated using Level 2 inputs based on general market prices.

Cintas uses interest rate locks to manage its overall interest expense as interest rate locks effectively change the interest rate of specific debt issuances. The interest rate locks are entered into to protect against unfavorable movements in the benchmark treasury rate related to forecasted debt issuances. 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 2012, fiscal 2013 and fiscal 2017. The amortization of the cash flow hedges resulted in a decrease to other comprehensive income of $1.2 million and $0.9 million in the fiscal years ended May 31, 2019 and 2018, respectively and an increase to other comprehensive income of $1.1 million in the fiscal year ended May 31, 2017. During fiscal 2019, Cintas entered into interest rate lock agreements with a notional value of $500.0 million for a forecasted debt issuance. As of the May 31, 2019, the fair value of these interest rate locks was a liability of $36.4 million that was recorded in long-term accrued liabilities and in other comprehensive income, net of tax. These interest rate locks had no impact on net income or cash flows from continuing operations for fiscal 2019.

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. There were no foreign currency hedge instruments outstanding during fiscal 2019, 2018 or 2017. Cintas had no foreign currency forward contracts as of May 31, 2019 or 2018.

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 consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) and interest coverage ratios. Cross-default provisions exist between certain debt instruments. 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. Cintas was in compliance with all of the debt covenants for all periods presented.