NOTE 6 – DEBT

Short-term borrowings consist of lines of credit that are secured by certain assets of the Company and its subsidiaries, which, in some cases, are guaranteed by the Company. The following table summarizes the balances of total facilities, facilities used and facilities available (in thousands):



			Facilities Outstanding
	Total Amount		Short-term		Letters of		Facilities		Weighted average
	of Facilities		Borrowings		Credit		Available		interest rate
May 31, 2018	$	72,750	$	334	$	2,610	$	69,806	4.0	%
August 31, 2017	$	69,000	$	—	$	966	$	68,034	—	%

As of May 31, 2018 and August 31, 2017, the Company had approximately $40.0 million of short-term facilities in the U.S. that require compliance with certain quarterly financial covenants. As of May 31, 2018 and August 31, 2017, the Company was in compliance with respect to these covenants. Each of the facilities expires annually and is normally renewed.

The following table provides the changes in long-term debt for the nine months ended May 31, 2018:



(Amounts in thousands)	Current portion of long-term debt		Long-term debt (net of current portion)		Total
Balances as of August 31, 2017	$	18,358	$	87,939	$	106,297	(1)
Proceeds from long-term debt incurred during the period:
Panama subsidiary		1,500		13,500		15,000
Honduras subsidiary		1,350		12,150		13,500
Repayments of long-term debt:
Repayment of loan by Honduras subsidiary with Scotiabank		(600)		(850)		(1,450)
Repayment of loans by Honduras subsidiary with Citibank		(1,850)		(6,063)		(7,913)
Repayment of loan by Trinidad subsidiary		(3,000)		(3,000)		(6,000)
Regularly scheduled loan payments		(3,739)		(9,829)		(13,568)
Reclassifications of long-term debt		2,479		(2,479)		—
Translation adjustments on foreign currency debt of subsidiaries whose functional currency is not the U.S. dollar (2)		146		(160)		(14)
Balances as of May 31, 2018	$	14,644	$	91,208	$	105,852	(3)

⁽¹⁾

The carrying amount of non-cash assets assigned as collateral for these loans was $128.4 million. No cash assets were assigned as collateral for these loans.

⁽²⁾

These foreign currency translation adjustments are recorded within Other comprehensive income.

⁽³⁾

The carrying amount of non-cash assets assigned as collateral for these loans was $129.5 million. No cash assets were assigned as collateral for these loans.

In March 2018, the Company's Panama subsidiary entered into a loan agreement with Scotiabank. The agreement provides for a US $15.0 million loan to be repaid in five years, renewable at the Bank’s exclusive option for one additional period of five years. The loan is to be repaid with quarterly principal and monthly interest payments. The interest rate is set at the 90 day LIBOR rate plus 3%. The loan was funded on March 23, 2018.

In March 2018, December 2017 and September 2017 the Company’s Trinidad subsidiary paid off the outstanding principal balances of U.S. $1.5 million, $1.5 million, and $3.0 million, respectively, on a loan agreement entered into with Citibank.

In February 2018, the Company’s Honduras subsidiary refinanced its portfolio of loans with Citibank. The original notional amount of this portfolio of loans was $13.5 million, which the Company drew down in fiscal 2015. There was approximately $7.9 million of remaining principal outstanding at the time of the refinancing. Under the refinancing agreement, the portfolio of loans was combined into one loan and the notional amount of the loan increased back to the original $13.5 million, with the interest rate set at the 90 day LIBOR rate plus 3.0%. In conjunction with the refinancing of these loans, the Company’s Honduras subsidiary drew down the additional $5.6 million notional amount during February 2018. In addition, the Company’s Honduras subsidiary entered into a cross-currency interest rate swap with Citibank whereby the Company’s subsidiary will pay Honduras Lempiras at a fixed interest rate of 9.75%.

In January 2018, the Company’s Honduras subsidiary paid off the outstanding principal balance of U.S. $1.5 million on a loan agreement entered into with Scotiabank.

In August 2017, the Company’s Panama subsidiary paid off the outstanding principal balance of U.S. $13.3 million on a loan agreement entered into with Scotiabank. The Company’s subsidiary also settled the interest rate swap that it had entered into with Scotiabank related to this loan.

On March 31, 2017, the Company's Trinidad subsidiary entered into a loan agreement with Citibank, N.A. The agreement provides for a $12.0 million loan to be repaid in eight quarterly principal payments plus interest. The interest rate is set at the 90 day LIBOR rate plus 3%. The loan was funded on March 31, 2017. As of May 31, 2018, Company's Trinidad subsidiary has repaid $4.5 million on this loan in addition of regularly scheduled loan payments. As of May 31, 2018, the remaining balance on this loan was $3.0 million.

In January 2017, the Company finalized its acquisition of a distribution center in Medley, Miami-Dade County, Florida for a total purchase price of approximately $46.0 million. The Company transferred its Miami distribution center activities previously located in leased facilities to the new distribution center during the third quarter of fiscal year 2017. To finance the acquisition of this property, the Company entered into a 10-year real estate secured loan with MUFG Union Bank, N.A. (“Union Bank”) for $35.7 million in January 2017. This loan has a variable interest rate of 30-day LIBOR plus 1.7%, with monthly principal and interest payments, maturing in 2027. The monthly principal and interest payments begin in April 2019. The Company also entered into an interest rate hedge with Union Bank for $35.7 million, the notional amount. Under the hedge, the Company will receive variable interest equal to 30-day LIBOR plus 1.7% and pay fixed interest at a rate of 3.65%, with an effective date of March 1, 2017 and maturity date of March 1, 2027.

As of May 31, 2018, the Company had approximately $96.1 million of long-term loans in the U.S., Trinidad, Panama, El Salvador, Honduras, Costa Rica and Colombia that require these subsidiaries to comply with certain annual or quarterly financial covenants, which include debt service and leverage ratios. As of May 31, 2018, the Company was in compliance with all covenants or amended covenants.

As of August 31, 2017, the Company had approximately $85.6 million of long-term loans in Trinidad, Panama, El Salvador, Honduras, Costa Rica, Barbados and Colombia that require these subsidiaries to comply with certain annual or quarterly financial covenants, which include debt service and leverage ratios. As of August 31, 2017, the Company was in compliance with all covenants or amended covenants.

Annual maturities of long-term debt are as follows (in thousands):



Twelve Months Ended May 31,	Amount
2019	$	14,644
2020		23,281
2021		12,881
2022		6,621
2023		4,125
Thereafter		44,300
Total	$	105,852