

NOTE 5—SHORT-TERM DEBT AND CREDIT ARRANGEMENTS

The following is a summary of short-term debt outstanding as of August 31, 2014 and May 31, 2014.



(Dollars in thousands)	August 31, 2014		May 31, 2014
Short-term debt:
Commercial paper sold through dealers, net of discounts ⁽¹⁾	$	1,959,894	$	1,973,557
Commercial paper sold directly to members, at par ⁽¹⁾	794,439		838,074
Commercial paper sold directly to non-members, at par ⁽¹⁾	19,793		20,315
Select notes	608,046		548,610
Daily liquidity fund notes	582,373		486,501
Bank bid notes	—		20,000
Medium-term notes sold to members	208,845		212,274
Total short-term debt	$	4,173,390	$	4,099,331

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⁽¹⁾ Backup liquidity is provided by our revolving credit agreements.

As indicated in "Note 1—Summary of Significant Accounting Policies", effective August 31, 2014, we began classifying debt as either short-term or long-term based on the original contractual maturity at issuance. For reporting periods prior to August 31, 2014, we reported long-term debt maturing within one year as part of our short-term debt. The amount reclassified from short-term debt to long-term debt as of May 31, 2014 was $1,300 million.

Revolving Credit Agreements

As of August 31, 2014 and May 31, 2014, we had $3,226 million of commitments under revolving credit agreements. We had the ability to request up to $100 million of letters of credit under each agreement in place as of August 31, 2014, which would then reduce the amount available under the facility. The following table presents the total available and the outstanding letters of credit under our revolving credit agreements as of August 31, 2014 and May 31, 2014.



	Total Available				Letters of Credit Outstanding
(Dollars in thousands)	August 31, 2014		May 31, 2014		August 31, 2014		May 31, 2014		Maturity	Annual Facility Fee ⁽¹⁾
Three-year agreement	$	1,036,000	$	1,036,000	$	—	$	—	October 28, 2016	10 basis points
Four-year agreement	1,122,500		1,122,500		—		—		October 28, 2017	10 basis points
Five-year agreement	1,065,609		1,065,609		1,891		1,891		October 28, 2018	10 basis points
Total	$	3,224,109	$	3,224,109	$	1,891	$	1,891

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⁽¹⁾Facility fee determined by CFC’s senior unsecured credit ratings based on the pricing schedules put in place at the inception of the related agreement.

The following represents our required and actual financial ratios under the revolving credit agreements as of August 31, 2014 and May 31, 2014.



		Actual
	Requirement	August 31, 2014	May 31, 2014
Minimum average adjusted TIER over the six most recent fiscal quarters⁽¹⁾	1.025	1.31	1.28
Minimum adjusted TIER for the most recent fiscal year ^{(1) (2)}	1.05	1.23	1.23
Maximum ratio of adjusted senior debt to total equity ⁽¹⁾	10.00	5.83	5.79

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⁽¹⁾In addition to the adjustments made to the leverage ratio set forth in "Item 7. MD&A—Non-GAAP Financial Measures," senior debt excludes guarantees to member systems that have certain investment-grade ratings from Moody’s Investors Service ("Moody's") and Standard & Poor’s Corporation ("S&P"). The TIER and debt-to-equity calculations include the adjustments set forth in "Item 7. MD&A—Non-GAAP Financial Measures" and exclude the results of operations and other comprehensive income for CAH.

⁽²⁾We must meet this requirement to retire patronage capital.

As of August 31, 2014 and May 31, 2014, we were in compliance with all covenants and conditions under our revolving credit agreements and there were no borrowings outstanding under these agreements.