Debt, Derivatives and Hedging Activities

Cintas' debt is summarized as follows:



(In thousands)	Interest Rate			Fiscal Year Issued	Fiscal Year Maturity	February 28, 2018			May 31, 2017

Debt due within one year
Commercial paper	1.93	%	⁽¹⁾	Various	Various	$	187,500		$	50,500
Senior notes	6.13	%		2008	2018	—			300,000
Current portion of term loan	2.00	%	⁽²⁾	2017	2018	—			12,500
Debt issuance costs						—			(100		)
Total debt due within one year						$	187,500		$	362,900

Debt due after one year
Senior notes	4.30	%		2012	2022	$	250,000		$	250,000
Senior notes	2.90	%		2017	2022	650,000			650,000
Senior notes	3.25	%		2013	2023	300,000			300,000
Senior notes ⁽³⁾	2.78	%		2013	2023	52,228			52,554
Senior notes ⁽⁴⁾	3.11	%		2015	2025	52,393			52,645
Senior notes	3.70	%		2017	2027	1,000,000			1,000,000
Senior notes	6.15	%		2007	2037	250,000			250,000
Long-term portion of term loan	2.00	%	⁽²⁾	2017	2022	—			237,500
Debt issuance costs						(19,861		)	(22,075		)
Total debt due after one year						$	2,534,760		$	2,770,624

⁽¹⁾ Variable rate debt instrument. The rate presented is the variable borrowing rate at February 28, 2018.

⁽²⁾ Variable rate debt instrument. The rate presented is the variable borrowing rate at May 31, 2017.

⁽³⁾ Cintas assumed these senior notes with the acquisition of G&K in the fourth quarter of fiscal 2017, and they were recorded at fair value. The interest rate shown above is the effective interest rate. The principal amount of these notes is $50.0 million with a stated interest rate of 3.73%.

⁽⁴⁾Cintas assumed these senior notes with the acquisition of G&K in the fourth quarter of fiscal 2017, and they were recorded at fair value. The interest rate shown above is the effective interest rate. The principal amount of these notes is $50.0 million with a stated interest rate of 3.88%.

Cintas' senior notes, excluding the G&K senior notes assumed with the acquisition of G&K in fiscal 2017, and term loan are recorded at cost, net of debt issuance costs. The fair value of the long-term debt is estimated using Level 2 inputs based on general market prices. The carrying value and fair value of Cintas' debt as of February 28, 2018 were $2,742.1 million and $2,789.6 million, respectively, and as of May 31, 2017 were $3,156.0 million and $3,296.8 million, respectively. In the first quarter of fiscal 2018, Cintas paid off the term loan balance of $250.0 million with cash on hand. On December 1, 2017, in accordance with the terms of the notes, Cintas paid the $300.0 million aggregate principal amount of its 6.13% 10-year senior notes that matured on that date with cash on hand and $265.0 million in proceeds from the issuance of commercial paper. During nine months ended February 28, 2018, Cintas issued $137.0 million, net of commercial paper.

The credit agreement that supports our commercial paper program was amended on September 16, 2016. The amendment increased the capacity of the revolving credit facility from $450.0 million to $600.0 million and added a $250.0 million term loan facility. The existing term loan facility was paid in full as of the first quarter of fiscal 2018. The credit agreement has an accordion feature that provides Cintas the ability to request increases to the borrowing commitments under either the revolving credit facility or a new term loan of up to $250.0 million in the aggregate, subject to customary conditions. The maturity date of the credit agreement is September 15, 2021. As of February 28, 2018, there was $187.5 million of commercial paper outstanding with a weighted average interest rate of 1.93% and maturity dates less than 30 days and no borrowings on our revolving credit facility. As of May 31, 2017, there was $50.5 million of commercial paper outstanding with a weighted average interest rate of 1.24% and maturity dates less than 30 days and no borrowings on our revolving credit facility. The fair value of the commercial paper is estimated using Level 2 inputs based on general market prices. Given its short-term nature, the carrying value of the outstanding commercial paper approximates fair value.

Cintas uses interest rate locks to manage our overall interest expense as interest rate locks effectively change the interest rate of specific debt issuances. The interest rate locks are entered into to protect against unfavorable movements in the benchmark treasury rate related to forecasted debt issuances. Cintas used interest rate lock agreements to hedge against movements in the treasury rates at the time Cintas issued its senior notes in fiscal 2007, fiscal 2008, fiscal 2012, fiscal 2013 and fiscal 2017. The amortization of the cash flow hedges resulted in a decrease to other comprehensive income of $0.3 million for the three months ended February 28, 2018 and an increase to other comprehensive income of $0.4 million for the three months ended February 28, 2017. For the nine months ended February 28, 2018 and 2017, the amortization of the cash flow hedges resulted in a decrease to other comprehensive income of $0.6 million and an increase to other comprehensive income of $1.2 million, respectively.

Cintas has certain covenants related to debt agreements. These covenants limit Cintas’ ability to incur certain liens, to engage in sale-leaseback transactions and to merge, consolidate or sell all or substantially all of Cintas’ assets. These covenants also require Cintas to maintain certain debt to consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) and interest coverage ratios. Cross-default provisions exist between certain debt instruments. If a default of a significant covenant were to occur, the default could result in an acceleration of the maturity of the indebtedness, impair liquidity and limit the ability to raise future capital. Cintas was in compliance with all debt covenants for all periods presented.