Debt

12 Months Ended

Feb. 29, 2020

DEBT



(In thousands)		As of February 29 or 28
Debt Description ⁽¹⁾	Maturity Date	2020			2019
Revolving credit facility ^{(2) (3)}	June 2024	$	452,740		$	366,529
Term loan ⁽²⁾	June 2024	300,000			300,000
3.86% Senior notes	April 2023	100,000			100,000
4.17% Senior notes	April 2026	200,000			200,000
4.27% Senior notes	April 2028	200,000			200,000
Financing obligations	Various dates through February 2059	536,739			495,626
Non-recourse notes payable	Various dates through July 2026	13,613,272			12,535,405
Total debt		15,402,751			14,197,560
Less: current portion		(433,456		)	(396,350		)
Less: unamortized debt issuance costs		(25,240		)	(24,676		)
Long-term debt, net		$	14,944,055		$	13,776,534


⁽¹⁾	Interest is payable monthly, with the exception of our senior notes, which are payable semi-annually.


⁽²⁾	Borrowings accrue interest at variable rates based on LIBOR, the federal funds rate, or the prime rate, depending on the type of borrowing.


⁽³⁾	During March 2020, we made net borrowings under this facility of approximately $675 million, following which more than $300 million in unused borrowing capacity remained.

Revolving Credit Facility. Borrowings under our $1.45 billion unsecured revolving credit facility (the “credit facility”) are available for working capital and general corporate purposes. We pay a commitment fee on the unused portions of the available funds. Borrowings under the credit facility are either due “on demand” or at maturity depending on the type of

borrowing. Borrowings with “on demand” repayment terms are presented as short-term debt while amounts due at maturity are presented as long-term debt as no repayments are expected to be made within the next 12 months. As of February 29, 2020, the unused capacity of $997.3 million was fully available to us.

The weighted average interest rate on outstanding short-term and long-term debt was 3.23% in fiscal 2020, 3.50% in fiscal 2019 and 2.49% in fiscal 2018.

Term Loan. Borrowings under our $300 million term loan are available for working capital and general corporate purposes. The interest rate on our term loan was 2.56% as of February 29, 2020, and the loan was classified as long-term debt as no repayments are scheduled to be made within the next 12 months.

Senior Notes. Borrowings under our unsecured senior notes totaling $500 million are available for working capital and general corporate purposes. These notes were classified as long-term debt as no repayments are scheduled to be made within the next 12 months.

Financing Obligations. Financing obligations relate to stores subject to sale-leaseback transactions that did not qualify for sale accounting. The financing obligations were structured at varying interest rates and generally have initial lease terms ranging from 15 to 20 years with payments made monthly. We have not entered into any new sale-leaseback transactions since fiscal 2009. In the event the agreements are modified or extended beyond their original term, the related obligation is adjusted based on the present value of the revised future payments, with a corresponding change to the assets subject to these transactions. Upon modification, the amortization of the obligation is reset, resulting in more of the payments being applied to interest expense in the initial years following the modification.

Future maturities of financing obligations were as follows:



(In thousands)	As of February 29, 2020
Fiscal 2021	$	52,504
Fiscal 2022	55,621
Fiscal 2023	52,343
Fiscal 2024	54,638
Fiscal 2025	53,310
Thereafter	887,650
Total payments	1,156,066
Less: interest	(619,327		)
Present value of financing obligations	$	536,739

Non-Recourse Notes Payable. The non-recourse notes payable relate to auto loans receivable funded through non-recourse funding vehicles. The timing of principal payments on the non-recourse notes payable is based on the timing of principal collections and defaults on the related auto loans receivable. The current portion of non-recourse notes payable represents principal payments that are due to be distributed in the following period.

Notes payable related to our asset-backed term funding transactions accrue interest predominantly at fixed rates and have scheduled maturities through July 2026, but may mature earlier, depending upon repayment rate of the underlying auto loans receivable.

Information on our funding vehicles of non-recourse notes payable as of February 29, 2020 are as follows:



(in billions)	Capacity
Warehouse facilities
August 2020 expiration	$	1.40
September 2020 expiration	0.15
February 2021 expiration	1.95
Combined warehouse facility limit	$	3.50
Unused capacity	$	1.32

Non-recourse notes payable outstanding:
Warehouse facilities	$	2.18
Asset-backed term funding transactions	11.43
Non-recourse notes payable	$	13.61

We enter into warehouse facility agreements for one-year terms and generally renew the agreements annually. The return requirements of warehouse facility investors could fluctuate significantly depending on market conditions. At renewal, the cost, structure and capacity of the facilities could change. These changes could have a significant impact on our funding costs. While we believe the unused capacity in our warehouse facilities could support CAF activity for several months, particularly in the current sales environment, we are actively assessing alternatives in the event the market for asset-backed securities remains disrupted for an extended period of time.

See Notes 1(F) and 4 for additional information on the related auto loans receivable.

Capitalized Interest. We capitalize interest in connection with the construction of certain facilities. For fiscal 2020, fiscal 2019 and fiscal 2018, we capitalized interest of $7.0 million, $6.4 million, and $6.9 million, respectively.

Financial Covenants. The credit facility, term loan and senior note agreements contain representations and warranties, conditions and covenants. We must also meet financial covenants in conjunction with certain financing obligations. The agreements governing our non-recourse funding vehicles contain representations and warranties, financial covenants and performance triggers. As of February 29, 2020, we were in compliance with all financial covenants and our non-recourse funding vehicles were in compliance with the related performance triggers. As of that date, our performance under these covenants could degrade such that, if the covenant ratios were to double, we would still remain in compliance.