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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables)
 9 Months Ended
May 31, 2018
Cash Flow Hedging [Member]  
Derivative [Line Items]  
Schedule of Interest Rate Derivatives



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subsidiary

 

Date
Entered
into

 

Derivative
Financial
Counter-
party

 

Derivative
Financial
Instruments

 

Initial
US$
Notional
Amount

 

Bank
US$
loan 
Held
with

 

Floating Leg
(swap
counter-party)

 

Fixed Rate
for PSMT
Subsidiary

 

Settlement
Dates

 

Effective
Period of swap

PriceSmart, Inc (1)

 

7-Nov-16

 

MUFG Union Bank, N.A. ("Union Bank")

 

Interest rate swap

 

$

 35,700,000 

 

Union Bank

 

Variable rate 1-month LIBOR plus 1.7%

 

 3.65 

%

 

1st day of each month beginning on April 1, 2017

 

March 1, 2017 -
March 1, 2027

Costa Rica

 

28-Aug-15

 

Citibank, N.A. ("Citi")

 

Cross currency interest rate swap

 

$

 7,500,000 

 

Citibank, N.A.

 

Variable rate 3-month LIBOR plus 2.50%

 

 7.65 

%

 

28th day of August, November, February, and May beginning on November 30, 2015

 

August 28, 2015 -
August 28, 2020

Honduras (2)

 

24-Mar-15

 

Citibank, N.A. ("Citi")

 

Cross currency interest rate swap

 

$

 8,500,000 

 

Citibank, N.A.

 

Variable rate 3-month LIBOR plus 3.25%

 

 10.75 

%

 

24th day of March, June, September, and December beginning on June 24, 2015

 

Refinanced on
February 26,2018

Honduras (2)

 

26-Feb-18

 

Citibank, N.A. ("Citi")

 

Cross currency interest rate swap

 

$

 13,500,000 

 

Citibank, N.A.

 

Variable rate 3-month LIBOR plus 3.00%

 

 9.75 

%

 

29th day of May, August, November and February beginning on May 29, 2018

 

February 26,2018 -
February 24, 2023

El Salvador

 

16-Dec-14

 

Bank of Nova Scotia ("Scotiabank")

 

Interest rate swap

 

$

 4,000,000 

 

Bank of Nova Scotia

 

Variable rate 30-day LIBOR plus 3.5%

 

 4.78 

%

 

29th day of each month beginning  on December 29, 2014

 

December 1, 2014 -
August 29, 2019

Colombia

 

10-Dec-14

 

Citibank, N.A. ("Citi")

 

Cross currency interest rate swap

 

$

 15,000,000 

 

Citibank, N.A.

 

Variable rate 3-month LIBOR plus 2.8%

 

 8.25 

%

 

4th day of March, June, Sept, Dec. beginning on March 4, 2015

 

December 4, 2014 -
December 3, 2019

Panama

 

9-Dec-14

 

Bank of Nova Scotia ("Scotiabank")

 

Interest rate swap

 

$

 10,000,000 

 

Bank of Nova Scotia

 

Variable rate 30-day LIBOR plus 3.5%

 

 5.16 

%

 

28th day of each month beginning December 29, 2014

 

November 28, 2014 -
November 29, 2019

Honduras

 

23-Oct-14

 

Citibank, N.A. ("Citi")

 

Cross currency interest rate swap

 

$

 5,000,000 

 

Citibank, N.A.

 

Variable rate 3-month LIBOR plus 3.5%

 

 11.6 

%

 

22nd day of January, April, July, and October beginning on January 22, 2015

 

Settled on
October 22, 2017

Panama

 

1-Aug-14

 

Bank of Nova Scotia ("Scotiabank")

 

Interest rate swap

 

$

 5,000,000 

 

Bank of Nova Scotia

 

Variable rate 30-day LIBOR plus 3.5%

 

 4.89 

%

 

21st day of each month beginning on September 22, 2014

 

August 21, 2014 -
August 21, 2019

Panama

 

22-May-14

 

Bank of Nova Scotia ("Scotiabank")

 

Interest rate swap

 

$

 3,970,000 

 

Bank of Nova Scotia

 

Variable rate 30-day LIBOR plus 3.5%

 

 4.98 

%

 

4th day of each month beginning on June 4, 2014

 

May 5, 2014 -
April 4, 2019



(1)

The initial notional amount and fixed rate were modified effective January 2017.

(2)

In February 2018, the Company’s Honduras subsidiary refinanced its portfolio of loans entered into 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 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.  As part of the terms, the existing cash flow hedge related to the original loan, was de-designated and incorporated into a new hedging relationship where the Company’s Honduras subsidiary has entered into a cross-currency interest rate swap with Citibank.  Under this new hedge agreement, the Company’s Honduras subsidiary will pay Honduras Lempiras, at a fixed interest rate of 9.75%. 

Interest Rate Swaps [Member] | Cash Flow Hedging [Member]  
Derivative [Line Items]  
Schedule of Notional Amounts of Outstanding Derivative Positions



 

 

 

 

 

 



 

 

 

 

 

 



 

Notional Amount as of



 

May 31,

 

August 31,

 Floating Rate Payer (Swap Counterparty)

 

2018

 

2017

Union Bank

 

$

 35,700 

 

$

 35,700 

Citibank N.A.

 

 

 28,725 

 

 

 26,088 

Scotiabank

 

 

 11,324 

 

 

 13,724 

Total

 

$

 75,749 

 

$

 75,512 



Derivative Swaps [Member] | Cash Flow Hedging [Member]  
Derivative [Line Items]  
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

May 31, 2018

 

August 31, 2017

Derivatives designated as cash flow hedging instruments

 

Balance Sheet
Location

 

Fair
Value

 

Net Tax
Effect

 

Net
OCI

 

Fair
Value

 

Net Tax
Effect

 

Net
OCI

Cross-currency interest rate swaps

 

Other non-current assets

 

$

 2,046 

 

$

 (618)

 

$

 1,428 

 

$

 2,547 

 

$

 (950)

 

$

 1,597 

Interest rate swaps

 

Other non-current assets

 

 

 2,035 

 

 

 (456)

 

 

 1,579 

 

 

 —

 

 

 —

 

 

 —

Interest rate swaps

 

Other long-term liabilities

 

 

 —

 

 

 —

 

 

 —

 

 

 (231)

 

 

 80 

 

 

 (151)

Cross-currency interest rate swaps

 

Other long-term liabilities

 

 

 (537)

 

 

 161 

 

 

 (376)

 

 

 (451)

 

 

 135 

 

 

 (316)

Net fair value of derivatives designated as hedging instruments

 

 

 

$

 3,544 

 

$

 (913)

 

$

 2,631 

 

$

 1,865 

 

$

 (735)

 

$

 1,130 



Derivative Swaps [Member] | Cash Flow Hedging [Member] | Interest Expense [Member]  
Derivative [Line Items]  
Schedule of Cash Flow Hedging Instruments, Statements of Financial Performance and Financial Position, Location



 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

Income Statement Classification

 

Interest
expense on
borrowings(1)

 

Cost of
swaps (2)

 

Total

Interest expense for the three months ended May 31, 2018

 

$

 1,136 

 

$

 277 

 

$

 1,413 

Interest expense for the three months ended May 31, 2017

 

$

 1,080 

 

$

 425 

 

$

 1,505 

Interest expense for the nine months ended May 31, 2018

 

$

 2,859 

 

$

 774 

 

$

 3,633 

Interest expense for the nine months ended May 31, 2017

 

$

 2,584 

 

$

 1,206 

 

$

 3,790 



(1)

This amount is representative of the interest expense recognized on the underlying hedged transactions.

(2)

This amount is representative of the interest expense recognized on the cross-currency interest rate swaps designated as cash flow hedging instruments.
Forward Foreign Exchange Contract [Member] | Fair Value Hedging [Member] | Other Income (Expense) [Member]  
Derivative [Line Items]  
Schedule of Cash Flow Hedging Instruments, Statements of Financial Performance and Financial Position, Location



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended

 

Nine Months Ended



 

May 31,

 

May 31,

 

May 31,

 

May 31,

Income Statement Classification

 

2018

 

2017

 

2018

 

2017

Other income (expense), net

 

$

 20 

 

$

 (177)

 

$

 (141)

 

$

 106 



Non-Deliverable Foreign Exchange Forward [Member] | Fair Value Hedging [Member]  
Derivative [Line Items]  
Schedule of Open Non-Deliverable Forward Foreign Exchange Contracts



 

 

 

 

 

 

 

 

 

 

 

 

 

Subsidiary

 

Dates
entered into

 

Financial
Derivative
(Counterparty)

 

Derivative
Financial
Instrument

 

 

Notional
Amount
(in thousands)

 

Settlement
Date

 

Effective 
Period of
Forward

PSMT, Inc.

 

29-May-18

 

MUFG Union Bank, N.A.

 

Forward foreign
exchange contracts (USD)

 

$

 577 

 

4-Jun-18

 

May 29, 2018 -
June 04, 2018