Notes Payable and Long-Term Debt

Our notes payable and long-term debt are subject to various restrictive requirements for maintenance of minimum consolidated net worth and other financial ratios. We were in compliance with our debt covenants as of August 31, 2017.

Notes Payable

Notes payable as of August 31, 2017, and 2016, consisted of the following:



	Weighted-average Interest Rate
	2017	2016	2017		2016
			(Dollars in thousands)
Notes payable	2.40%	1.72%	$	1,695,423	$	1,803,174
CHS Capital notes payable	1.93%	1.31%	292,792		928,305
Total notes payable			$	1,988,215	$	2,731,479

In September 2015, we amended and restated our primary committed line of credit which is a five-year, unsecured revolving credit facility with a syndication of domestic and international banks.

In December 2015, we entered into three bilateral, uncommitted revolving credit facilities, of which one remains. Amounts borrowed under these short-term credit facilities are used to fund our working capital. The following table summarizes our primary lines of credit as of August 31, 2017, and 2016:



Revolving Credit Facilities	Maturities	Total Capacity		Borrowings Outstanding		Interest Rates
		2017		2017	2016
		(Dollars in thousands)
Committed Five-Year Unsecured Facility	2020	$	3,000,000	$480,000	$700,000	LIBOR+0.00% to 1.45%
Uncommitted Bilateral Facilities	2017	250,000		250,000	300,000	LIBOR+0.00% to 1.05%

In addition to our primary revolving lines of credit, we have a three-year $325.0 million committed revolving pre-export credit facility for CHS Agronegocio Industria e Comercio Ltda ("CHS Agronegocio"), our wholly-owned subsidiary, to provide financing for its working capital needs arising from its purchases and sales of grains, fertilizers and other agricultural products which expires in April 2019. As of August 31, 2017, the outstanding balance under the facility was $250.0 million.

As of August 31, 2017, our wholly-owned subsidiaries, CHS Europe S.a.r.l. and CHS Agronegocio, had uncommitted lines of credit with $433.9 million outstanding. In addition, our other international subsidiaries had lines of credit with a total of $168.4 million outstanding as of August 31, 2017, of which $15.4 million was collateralized.

We also maintain an uncommitted bilateral facility available to multiple subsidiaries with an outstanding balance under the facility of $100.0 million as of August 31, 2017. Miscellaneous short-term notes payable totaled $13.1 million as of August 31, 2017.

CHS Capital Notes Payable

On July 18, 2017, we amended the facility with certain unaffiliated financial institutions. Under the Securitization Facility, CHS Capital and CHS both sell eligible Receivables they have originated to Cofina, a wholly owned, bankruptcy-remote, indirect subsidiary of CHS. Cofina in turn sells the purchased Receivables in their entirety to the Purchasers. Prior to the amended Securitization Facility in July 2017, the transfer of Receivables was accounted for as a secured borrowing. Under the terms of the amended Securitization Facility, CHS accounts for Receivables sold under the facility as a sale of financial assets and derecognizes the sold Receivables from its Consolidated Balance Sheets. The amount available under the Facility fluctuates over time based on the total amount of eligible Receivables generated during the normal course of business, with maximum availability of $700.0 million. As of August 31, 2017, the total availability under the Securitization Facility was $618.0 million, of which all has been utilized.

CHS Capital has available credit under master participation agreements with numerous counterparties. Prior to the fourth quarter of fiscal 2017 all borrowings under these agreements were accounted for as secured borrowings. During the fourth quarter of fiscal 2017 certain of these agreements were amended resulting in the Company accounting for the participations as the sale of financial assets. As of August 31, 2017, the remaining participations accounted for as secured borrowings bear interest at variable rates ranging from 2.61% to 4.45%. As of August 31, 2017, the total funding commitment under these agreements was $94.1 million, of which $29.4 million was borrowed.

CHS Capital sells loan commitments it has originated to ProPartners Financial ("ProPartners") on a recourse basis. The total capacity for commitments under the ProPartners program is $265.0 million. The total outstanding commitments under the program totaled $220.2 million as of August 31, 2017, of which $144.1 million was borrowed under these commitments with an interest rate of 2.45%.

CHS Capital borrows funds under short-term notes issued as part of a surplus funds program. Borrowings under this program are unsecured and bear interest at variable rates ranging from 0.10% to 0.90% as of August 31, 2017, and are due upon demand. Borrowings under these notes totaled $119.3 million as of August 31, 2017.

Long-Term Debt

Amounts included in long-term debt on our Consolidated Balance Sheets as of August 31, 2017, and 2016, are presented in the table below.



	2017			2016
	(Dollars in thousands)
6.18% unsecured notes $400 million face amount, due in equal installments beginning in 2014 through 2018	$	80,000		$	160,000
5.60% unsecured notes $60 million face amount, due in equal installments beginning in 2012 through 2018	4,615			13,846
5.78% unsecured notes $50 million face amount, due in equal installments beginning in 2014 through 2018	10,000			20,000
4.00% unsecured notes $100 million face amount, due in equal installments beginning in 2017 through 2021	80,000			100,000
4.08% unsecured notes $130 million face amount, due in 2019 ^(a)	130,690			141,344
4.52% unsecured notes $160 million face amount, due in 2021 ^(a)	163,496			162,633
4.67% unsecured notes $130 million face amount, due in 2023 ^(a)	135,792			138,101
4.39% unsecured notes $152 million face amount, due in 2023	152,000			152,000
3.85% unsecured notes $80 million face amount, due in 2025	80,000			80,000
3.80% unsecured notes $100 million face amount, due in 2025	100,000			100,000
4.58% unsecured notes $150 million face amount, due in 2025	149,293			150,000
4.82% unsecured notes $80 million face amount, due in 2026	80,000			80,000
4.69% unsecured notes $58 million face amount, due in 2027	58,000			58,000
4.74% unsecured notes $95 million face amount, due in 2028	95,000			95,000
4.89% unsecured notes $100 million face amount, due in 2031	100,000			100,000
4.71% unsecured notes $100 million face amount, due in 2033	100,000			100,000
5.40% unsecured notes $125 million face amount, due in 2036	125,000			125,000
Private Placement debt	1,643,886			1,775,924
5.59% unsecured term loans from cooperative and other banks, due in equal installments beginning in 2013 through 2018	15,000			45,000
2.25% unsecured term loans from cooperative and other banks, due in 2025^(b)	430,000			300,000
Bank financing	445,000			345,000
Capital lease obligations	33,075			105,708
Other notes and contracts with interest rates from 1.30% to 15.25%	62,652			76,147
Deferred financing costs	(4,820		)	(5,574		)
Total long-term debt	2,179,793			2,297,205
Less current portion	156,345			214,329
Long-term portion	$	2,023,448		$	2,082,876

_______________________________________


^(a)	We have entered interest rate swaps designated as fair value hedging relationships with these notes. Changes in the fair value of the swaps are recorded each period with a corresponding adjustment to the carrying value of the debt. See Note 12, Derivative Financial Instruments and Hedging Activities for more information.


^(b)	Borrowings are variable under the agreement and bear interest at a base rate (or a LIBO rate) plus an applicable margin.

As of August 31, 2017, the carrying value of our long-term debt approximated its fair value, which is estimated to be $2.1 billion based on quoted market prices of similar debt (a Level 2 fair value measurement based on the classification hierarchy of ASC Topic 820, Fair Value Measurement). We have outstanding interest rate swaps designated as fair value hedges of select portions of our fixed-rate debt. During fiscal 2017, we recorded corresponding fair value adjustments of $12.8 million, which are included in the amounts in the table above. See Note 12, Derivative Financial Instruments and Hedging Activities for additional information.

In September 2015, we entered a ten-year term loan with a syndication of banks. The agreement provides for committed term loans in an amount up to $600.0 million. The full amount was drawn down in January 2016. Amounts drawn under this agreement that are subsequently repaid or prepaid may not be reborrowed. Principal on the term loans is payable in full on September 4, 2025. Borrowings under the agreement bear interest at a base rate (or a LIBO rate) plus an applicable margin, or at a fixed rate of interest determined and quoted by the administrative agent under the agreement in its sole and absolute discretion from time to time. The applicable margin is based on our leverage ratio and ranges between 1.50% and 2.00% for LIBO rate loans and between 0.50% and 1.00% for base rate loans. As of August 31, 2017, $300.0 million was outstanding under this agreement.

In January 2016, we consummated a private placement of long-term notes in the aggregate principal amount of $680.0 million with certain accredited investors, which long-term notes are layered into six series which are included in the table above.

In June 2016, we amended the ten-year term loan so that $300.0 million of the $600.0 million loan balance possessed a revolving feature, whereby we were able to pay down and re-advance an amount up to the referenced $300.0 million. The revolving feature matured on September 1, 2017, and the total funded loan balance on that day reverted to a non-revolving term loan. No other material changes were made to the original terms and conditions of the ten-year term loan. During fiscal 2017, we re-advanced $130.0 million under the revolving provision of the loan. The terms of the re-advance are the same as the terms of the original term loan.

Long-term debt outstanding as of August 31, 2017, has aggregate maturities, excluding fair value adjustments and capital leases (see Note 5, Property, Plant and Equipment for a schedule of minimum future lease payments under capital leases), as follows:



	(Dollars in thousands)
2018	$	149,050
2019	167,412
2020	31,478
2021	182,949
2022	126
Thereafter	1,611,385
Total	$	2,142,400

Interest expense for the years ended August 31, 2017, 2016, and 2015, was $171.2 million, $113.7 million and $70.7 million, respectively, net of capitalized interest of $6.9 million, $30.3 million and $57.3 million.