Long-Term Debt And Credit Facilities

6 Months Ended

Nov. 30, 2011

LONG-TERM DEBT AND CREDIT FACILITIES

Outstanding debt consisted of the following:



	November 30, 2011		May 31, 2011
Lines of credit:	(in thousands)
Corporate Credit Facility - long-term	$	163,922	$	183,975
Short-term lines of credit:
United Kingdom Credit Facility	78,413		108,333
Hong Kong Credit Facility	82,863		73,554
Canada Credit Facility	7,189		18,725
Malaysia Credit Facility	17,866		17,743
Spain Credit Facility	16,258		17,646
Singapore Credit Facility	9,564		17,245
Philippines Credit Facility	6,096		9,736
Maldives Credit Facility	2,843		3,202
Macau Credit Facility	2,396		2,372
Sri Lanka Credit Facility	2,188		2,189
Total short-term lines of credit	225,676		270,745
Total lines of credit	389,598		454,720
Notes Payable	13,363		14,285
Term loans	113,899		155,759
Total debt	$	516,860	$	624,764

Current portion	$	313,638	$	356,547
Long-term debt	203,222		268,217
Total debt	$	516,860	$	624,764

Lines of Credit

The Corporate Credit Facility is available for general corporate purposes and to fund future strategic acquisitions. Our short-term line of credit facilities are used to fund settlement and provide a source of working capital. With certain of our credit facilities, the facility nets the amounts pre-funded to merchants against specific cash balances in local Global Payments accounts, which we characterize as cash and cash equivalents. Therefore, the amounts reported in lines of credit, which represents the amounts pre-funded to merchants, may exceed the stated credit limit, when in fact the combined position is less than the credit limit. The total available incremental borrowings under our credit facilities at November 30, 2011 were $925.9 million, of which $436.1 million is available under our Corporate Credit Facility.

Term Loans

We have a five year unsecured $200.0 million term loan agreement with a syndicate of banks in the United States which we used to partially fund our HSBC Merchant Services LLP acquisition. The term loan expires in June 2013 and bears interest, at our election, at the prime rate or LIBOR, plus a leverage based margin. As of November 30, 2011 the interest rate on the term loan was 1.26%. The term loan calls for quarterly principal payments of $5.0 million beginning with the quarter ended November 30, 2008 and increasing to $10.0 million beginning with the quarter ended November 30, 2010 and $15.0 million beginning with the quarter ending November 30, 2011. As of November 30, 2011, the outstanding balance of the term loan was $90.0 million.

We have a $300.0 million term loan agreement ($230.0 million and £43.5 million) with a syndicate of financial institutions. In December 2010, the entire balance of the United States dollar portion of the term loan was repaid by a borrowing on the Corporate Credit Facility, and the facility terms were amended. The term loan expires in July 2012 and has a variable interest rate based on the LIBOR plus a leverage based margin. As of November 30, 2011, the interest rate on the remaining British Pound Sterling portion of the term loan was 2.25%. The term loan requires quarterly principal payments of £2.2 million beginning with the quarter ended November 30, 2009 and increasing to £3.3 million beginning with the quarter ended November 30, 2010. As of November 30, 2011, the outstanding balance of this term loan was $23.9 million (£15.2 million).

Notes Payable

UCS, our subsidiary in the Russian Federation, has notes payable with a total outstanding balance of approximately $13.4 million at November 30, 2011. These notes have fixed interest rates ranging from 8.0% to 10.0% with maturity dates ranging from December 2011 through November 2016.

Compliance with Covenants

There are certain financial and non-financial covenants contained in our various credit facilities and term loans. Our term loan agreements include financial covenants requiring a leverage ratio no greater than 3.25 to 1.00 and a fixed charge coverage ratio no less than 2.50 to 1.00. We complied with these covenants as of November 30, 2011.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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