Long-Term Debt

6 Months Ended

Aug. 31, 2019

We have a credit agreement (the “Credit Agreement”) with Bank of America, N.A., as administrative agent, and other lenders that provided for an unsecured total revolving commitment of $1.0 billion as of August 31, 2019. The commitment under the Credit Agreement terminates on December 7, 2021. Borrowings accrue interest under one of two alternative methods (based upon a base rate of LIBOR) as described in the Credit Agreement. With each borrowing against our credit line, we can elect the interest rate method based on our funding needs at the time. We also incur loan commitment fees and letter of credit fees under the Credit Agreement. Outstanding letters of credit reduce the borrowing availability under the Credit Agreement on a dollar-for-dollar basis. As of August 31, 2019, the outstanding revolving loan principal balance was $283.0 million (excluding prepaid financing fees) and the face amount of outstanding letters of credit was $9.0 million. For the three and six month periods ended August 31, 2019, borrowings under the Credit Agreement incurred interest charges at rates ranging from 3.1% to 5.5%. For the three and six month periods ended August 31, 2018, borrowings under the Credit Agreement incurred interest charges at rates ranging from 2.9% to 5.0% and 2.8% to 5.0%, respectively. As of August 31, 2019, the amount available for borrowings under the Credit Agreement was $708.0 million. Covenants in our debt agreements limit the amount of total indebtedness we can incur. As of August 31, 2019, these covenants effectively limited our ability to incur more than $609.0 million of additional debt from all sources, including our Credit Agreement, or $708.0 million in the event a qualified acquisition is consummated. The following table summarizes our long-term debt as of the end of the periods shown:



(in thousands)	Original Date Borrowed	Interest Rates	Matures	August 31, 2019			February 28, 2019
Mississippi Business Finance Corporation Loan (the "MBFC Loan") (1)	03/13	Floating	03/23	$	20,443		$	22,335
Credit Agreement (2)	01/15	Floating	12/21	280,750			298,449
Total long-term debt				301,193			320,784
Less current maturities of long-term debt				(1,884		)	(1,884		)
Long-term debt, excluding current maturities				$	299,309		$	318,900

(1)

The MBFC Loan is unsecured with an original balance of $37.6 million and incurs floating interest based on applicable LIBOR plus a margin of up to 2.0%, or a Base Rate plus a margin of up to 1.0%, as determined by the interest rate elected and the Leverage Ratio. The loan is subject to holder’s call on or after March 1, 2018. The loan can be prepaid without penalty. The remaining principal balance is payable as follows: $1.9 million annually on March 1, 2020 through 2022; and $14.8 million on March 1, 2023. Any remaining outstanding principal and interest is due upon maturity on March 1, 2023.


(2)	Floating interest rates are hedged with interest rate swaps to effectively fix interest rates on $225 million of the outstanding principal balance under the Credit Agreement. Notes 13 and 14 to these condensed consolidated financial statements provide additional information regarding the interest rate swaps.

At August 31, 2019 and February 28, 2019, our long-term debt has floating interest rates, and its book value approximates its fair value.

All of our debt is unconditionally guaranteed, on a joint and several basis, by the Company and certain of its subsidiaries. Our debt agreements require the maintenance of certain financial covenants, including a maximum leverage ratio and a minimum interest coverage ratio (as each of these terms is defined in the agreements). Our debt agreements also contain other customary covenants. We were in compliance with the terms of these agreements as of August 31, 2019.