Debt and Derivatives

12 Months Ended

May 31, 2021

Cintas' outstanding debt is summarized as follows at May 31:


(In thousands)	Interest Rate	Fiscal Year Issued	Fiscal Year Maturity	2021		2020

Debt due within one year
Senior notes	4.30%	2012	2022	$	250,000	$	—
Senior notes	2.90%	2017	2022	650,000		—


Debt issuance costs				(930)		—
Total debt due within one year				$	899,070	$	—

Debt due after one year
Senior notes	4.30%	2012	2022	$	—	$	250,000
Senior notes	2.90%	2017	2022	—		650,000
Senior notes	3.25%	2013	2023	300,000		300,000
Senior notes (1)	2.78%	2013	2023	50,815		51,250
Senior notes (2)	3.11%	2015	2025	51,301		51,637
Senior notes	3.70%	2017	2027	1,000,000		1,000,000
Senior notes	6.15%	2007	2037	250,000		250,000

Debt issuance costs				(9,283)		(13,182)
Total debt due after one year				$	1,642,833	$	2,539,705

(1) 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%.

(2) 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%.

The average interest rate for all Cintas debt at May 31, 2021 was 3.8%, with maturity dates through fiscal year 2037. Cintas' senior notes, excluding the G&K senior notes assumed with the acquisition of G&K in fiscal 2017, 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 May 31, 2021 were $2,550.0 million and $2,788.8 million, respectively, and as of May 31, 2020 were $2,550.0 million and $2,804.2 million, respectively. During the fiscal year ended May 31, 2020, Cintas paid a net total of $112.5 million of commercial paper. On June 1, 2021, in accordance with the terms of the notes, Cintas paid the $250.0 million aggregate principal amount of its 4.30%, 10-year senior notes that matured on that date with cash on hand. There was no commercial paper outstanding during fiscal 2021.

Letters of credit outstanding were $120.6 million at both May 31, 2021 and 2020. Maturities of debt during each of the next five years are $900.0 million, $350.0 million, $0.0 million, $50.0 million and $0.0 million, respectively.

Interest paid was $98.3 million, $105.5 million and $101.8 million for the fiscal years ended May 31, 2021, 2020 and 2019, respectively.

The credit agreement that supports our commercial paper program was amended and restated on May 24, 2019. The amendment increased the capacity of the revolving credit facility from $600.0 million to $1.0 billion and created a new term loan of $200.0 million. 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 the term loan of up to $250.0 million in the aggregate, subject to customary conditions. The maturity date of the revolving credit facility is May 23, 2024. As of May 31, 2021 and 2020, there was no commercial paper outstanding and no borrowings on our revolving credit facility.

Cintas uses interest rate locks to manage its 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 2012, fiscal 2013 and fiscal 2017. The amortization of the cash flow hedges resulted in a decrease to other comprehensive income (loss) of $1.4 million, $1.4 million and $1.2 million in the fiscal years ended May 31, 2021, 2020 and 2019, respectively. During fiscal 2020 and 2019, Cintas entered into interest rate lock agreements with a total notional value of $950.0 million and $500.0 million, respectively, for forecasted debt issuances in connection with upcoming debt maturities.

The fair values of the outstanding interest rate lock agreements is summarized as follows at May 31:


			2021				2020
Fiscal Year of Issuance (in thousands)	Notional Value		Other assets, net		Long-term accrued liabilities		Other assets, net		Long-term accrued liabilities

2020	$	950,000	$	40,400	$	—	$	1,546	$	53,817
2019	$	500,000	$	—	$	61,657	$	—	$	111,869

The interest rate locks are also recorded in other comprehensive income (loss), net of tax. These interest rate locks had no impact on net income or cash flows from continuing operations for the fiscal years ended May 31, 2021, 2020 or 2019.

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 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 of the debt covenants for all periods presented.

As of May 31, 2020, the Company had unrecognized inventory purchase commitments with various suppliers totaling $117.6 million, respectively. All unrecognized inventory purchase commitments outstanding at May 31, 2020 were satisfied during fiscal 2021.