At May 31, 2020 and May 26, 2019, our debt, including financing obligations, was as follows (dollars in millions):

(a)	On May 27, 2019, we adopted ASC 842 and we eliminated this financing obligation, related to a sale leaseback, as part of the cumulative-effect transition adjustment. See Note 1, Nature of Operations and Summary of Significant Accounting Policies, for more information.

(b)	The interest rates on our lease financing obligations ranged from 2.31% to 4.10% at May 31, 2020 and 2.72% to 4.33% at May 26, 2019, respectively. For more information on our lease financing obligations, see Note 4, Leases.

(c)

We amortize debt issuance costs into interest expense using the effective interest method over the life of the loan facilities. In fiscal 2020, 2019, and 2018, we recorded $6.2 million, $4.7 million, and $4.6 million, respectively, of amortization expense in “Interest expense” in our Consolidated Statements of Earnings. Fiscal 2020 included a $1.7 million write-off of debt issuance costs in connection with the $300.0 million payment on the Term loan facility due in 2021.

Revolving Credit Facility and Term Loan Facility (together “Credit Facilities”)

In November 2016, we entered into a five-year $675.0 million amortizing term loan facility and a five-year non-amortizing $500.0 million revolving credit facility that mature in November 2021.

In March 2020, we drew $495.0 million available under the revolving credit facility and in June and July 2020, we repaid $100.0 million and $395.0 million, respectively. As of July 2020, $495.1 million was available to us under the revolving credit facility, net of $4.9 million of outstanding letters of credit. For the periods from May 27, 2019 through May 31, 2020 and May 28, 2018 through May 26, 2019, the weighted average interest rate for our outstanding borrowings under the revolving credit facility was 2.35% and 3.94%, respectively. At May 31, 2020, we had $276.6 million outstanding under the term loan facility.

Borrowings under the Credit Facilities bear interest at a floating rate per annum based upon the Base Rate or the Eurocurrency rate, in each case, plus an applicable margin which varies based upon our consolidated net leverage ratio. Margins range from 0.500% to 1.250% for Base Rate loans and from 1.500% to 2.250% for Eurocurrency rate loans. The Base Rate is defined as the highest of (a) Bank of America’s prime rate, (b) the federal funds rate plus 0.500%, and (c) the Eurocurrency rate with a term of one month plus 1.0%. In addition to paying interest, we pay an annual commitment fee for undrawn amounts at a rate of 0.25% to 0.40%, depending on our consolidated net leverage ratio.

Under the terms of the credit agreement, we must maintain ratios as of the last day of each fiscal quarter, of consolidated net leverage ratio of 4.50 to 1.00 and an interest coverage ratio of 2.75 to 1.00. The credit agreement also contains covenants that, subject to exceptions, limit our ability and the ability of our subsidiaries to, among other things, incur, assume or guarantee additional indebtedness, pay distributions on, redeem or repurchase capital stock or redeem or repurchase subordinated debt, make loans and investments, incur or suffer to exist liens, sell, transfer or otherwise dispose of assets, enter into agreements that restrict distributions or other payments from restricted subsidiaries to us, engage in transactions with affiliates, designate subsidiaries as unrestricted or restricted, and consolidate, merge, amalgamate or transfer all or substantially all of our assets.

Upon the occurrence of an event of default, among other things, amounts outstanding under the Credit Facilities may be accelerated and the commitments may be terminated. Our obligations under the Credit Facilities are unconditionally guaranteed by certain of our direct and indirect domestic subsidiaries on the terms set forth in the credit agreement. The credit agreement is secured by security interests and liens on substantially all of our and each of our subsidiary guarantor’s assets, as long as Lamb Weston remains below investment grade by both Moody’s and Standard & Poor’s.

Term A-1 and A-2 Loan Facilities due 2024 and 2025

On June 28, 2019, we entered into a credit agreement, among Lamb Weston, certain of our subsidiaries as guarantors, certain lenders, and Northwest Farm Credit Services, PCA, as administrative agent for the lenders, providing for a $300.0 million term loan facility and, under certain circumstances, the ability to add incremental facilities in an aggregate amount of up to $100.0 million (collectively, “Term A-1 Loan Facility”). Borrowings on the Term A-1 Loan Facility amortize in equal quarterly installments for a total of 5% annually, with the balance payable in June 2024. The proceeds of the term loans under the Term A-1 Loan Facility were used to repay $300.0 million of the term loan facility due in 2021.

Borrowings under the Term A-1 Loan Facility bear interest, before anticipated patronage dividends, at LIBOR or the Base Rate (as defined in the Term A-1 Loan Facility agreement) plus an applicable margin ranging from 1.625% to 2.375% for LIBOR-based loans and from 0.625% to 1.375% for Base Rate-based loans, depending upon our consolidated net leverage ratio. During the year ended May 31, 2020, the average interest rate on the Term A-1 Loan Facility was approximately 3.33%. We have received and expect to continue receiving patronage dividends under the Term A-1 Loan Facility. After giving effect to expected patronage distributions, the effective average interest rate on the Term A-1 Loan Facility was approximately 2.52%.

On April 20, 2020, we amended the Term A-1 Loan Facility agreement to, among other things, provide for a new $325.0 million term loan facility (“Term A-2 Loan Facility”). Borrowings under the Term A-2 Loan Facility bear interest, before anticipated patronage dividends, at LIBOR or the Base Rate (as defined in the Term A-2 Loan Facility agreement) plus an applicable rate ranging from 2.200% to 2.950% for LIBOR-based loans and from 1.200% to 1.950% for Base Rate-based loans, depending on our consolidated net leverage ratio. The borrowings mature on April 20, 2025. During the year ended May 31, 2020, the average interest rate on the Term A-2 Loan Facility was approximately 2.85%. We expect to receive patronage dividends under the Term A-2 Loan Facility. After giving effect to expected patronage distributions, the effective average interest rate on the Term A-2 Loan Facility was approximately 2.03%.

The Term A-1 and A-2 Loan Facilities are unconditionally guaranteed by the same subsidiaries as the Credit Facilities discussed above. Borrowings under the Term A-1 and A-2 Loan Facilities may be prepaid without premium or penalty and once repaid, cannot be reborrowed. Additionally, the covenants, events of default, securities and liens are consistent with the Credit Facilities.

4.625% Senior Notes due 2024 and 4.875% Senior Notes due 2026

In November 2016, we issued (i) $833.0 million aggregate principal amount of 4.625% senior notes due 2024 (“2024 Notes”) and (ii) $833.0 million aggregate principal amount of 4.875% senior notes due 2026 (“2026 Notes”) pursuant to indentures, dated as of November 9, 2016, among Lamb Weston, certain of our subsidiaries as guarantors and Wells Fargo Bank, National Association, as trustee. Our obligations under the 2024 Notes and 2026 Notes are unconditionally guaranteed on a senior unsecured basis by each of our subsidiaries that guarantee our obligations under the Credit Facilities.

The 2024 Notes and 2026 Notes are senior unsecured obligations and rank equally with all of our current and future senior indebtedness, rank senior to all our current and future subordinated indebtedness and are subordinated to all of our current and future secured indebtedness (including all borrowings with respect to the Credit Facilities and Term A-1 and A-2 Loan Facilities to the extent of the value of the assets securing such indebtedness). Interest on the 2024 Notes and 2026 Notes is due semiannually. The 2024 Notes mature on November 1, 2024 and the 2026 Notes mature on November 1, 2026, unless either is redeemed or repurchased. Upon a change of control (as defined in the indentures governing the 2024 Notes and 2026 Notes), we must offer to repurchase the 2024 Notes and 2026 Notes at 101% of the principal amount of such notes, plus accrued and unpaid interest.

We may redeem all or a portion of the 2024 Notes at any time on or after November 1, 2021, at declining prices starting at 102.313%, plus accrued and unpaid interest. We may redeem all or a portion of the 2026 Notes at any time on or after November 1, 2021, at declining prices starting at 102.438%, plus accrued and unpaid interest. Prior to November 1, 2021, we may redeem notes of either series, in whole at any time or in part, from time to time, at a price equal to 100% of the principal amount thereof, plus a make-whole premium, plus accrued and unpaid interest.

The indentures governing the 2024 Notes and 2026 Notes contain covenants that, subject to exceptions, limit our ability and the ability of our subsidiaries to, among other things, incur, assume or guarantee additional indebtedness, pay distributions on, redeem or repurchase capital stock or redeem or repurchase subordinated debt, make loans and investments, incur or suffer to exist liens, sell, transfer or otherwise dispose of assets, enter into agreements that restrict distributions or other payments from restricted subsidiaries to us, engage in transactions with affiliates, designate subsidiaries as unrestricted or restricted, and consolidate, merge, amalgamate or transfer all or substantially all of our assets.

4.875% Senior Notes due 2028

In May 2020, we issued $500.0 million aggregate principal amount of 4.875% senior notes due in 2028 (“2028 Notes”) pursuant to an indenture, dated as of May 12, 2020, among Lamb Weston, certain of our subsidiaries as guarantors and Wells Fargo Bank, National Association, as trustee. Our obligations under the 2028 Notes are unconditionally guaranteed on a senior unsecured basis by each of our subsidiaries that guarantee our obligations under the Credit Facilities. The 2028 Notes bear interest at a rate of 4.875% per year and mature on May 15, 2028, unless earlier redeemed or repurchased. We capitalized approximately $6.2 million of debt issuance costs associated with this offering.

The 2028 Notes are senior unsecured obligations and rank equally with all of our current and future senior indebtedness (including the 2024 and 2026 Notes), rank senior to all our current and future subordinated indebtedness and are subordinated to all of our current and future secured indebtedness (including all borrowings with respect to the Credit Facilities and the Term A-1 and A-2 Loan Facilities to the extent of the value of the assets securing such indebtedness). Interest on the 2028 Notes is due semiannually. Upon a change of control (as defined in the indenture governing the 2028 Notes), we must offer to repurchase the 2028 Notes at 101% of the principal amount of the notes, plus accrued and unpaid interest.

Prior to November 15, 2027, we may redeem the 2028 Notes, in whole at any time or in part, from time to time, at a price equal to 100% of the principal amount thereof, plus a make-whole premium, plus accrued and unpaid interest. On and after November 15, 2027, we may redeem all or any portion of the 2028 Notes, at once or over time, at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest.

The covenants and events of default are substantially similar to the 2024 and 2026 Notes discussed above.

Debt Maturities

The aggregate minimum principal maturities of our long-term debt, including current portion, for the next five fiscal years and thereafter, are as follows (dollars in millions):



	Debt (a)
2021	$	544.6
2022		289.0
2023		31.3
2024		31.3
2025		1,325.8
Thereafter		1,333.0
	$	3,555.0

(a)	Debt includes $495.0 million of borrowings on the Revolving Credit Facility which we fully repaid in July 2020 (discussed above) and $3.7 million of expected payments on our other credit facilities in 2021. See Note 4, Leases, for maturities of our lease financing obligations.

During fiscal 2020, 2019, and 2018 we paid $105.7 million, $107.8 million, and $104.0 million, respectively, of interest on debt.

Other Credit Facilities

We have $30.8 million of other credit facilities, under which $3.7 million and $1.2 million were outstanding at May 31, 2020 and May 26, 2019, respectively. These facilities consist of two overdraft lines. Borrowings under the facilities bear interest at a percentage of the stated rate of $3.56% and 4.35% at May 31, 2020 and May 26, 2019, respectively, and may be prepaid without penalty. We guarantee the full amount of our subsidiary’s obligations to the financial institution up to the maximum amount of the credit facility.

Financing Obligations

During fiscal 2010, we completed the sale of approximately 17,600 acres of farmland to an unrelated buyer and immediately entered into an agreement with an affiliate of the buyer to lease back the farmland. Lamb Weston’s performance under the lease was guaranteed by Conagra. Conagra’s guarantee precluded accounting for this transaction as a sale and leaseback and, accordingly, the $75.0 million of proceeds received were treated as a financing obligation and the land and related equipment was included on our Consolidated Balance Sheets. At May 26, 2019, the remaining balance of the financing obligation was $65.3 million and the net carrying value of the related property was $38.7 million. On May 27, 2019, we adopted ASC 842 and we eliminated this financing obligation, related to a sale leaseback, as part of the cumulative-effect transition adjustment.