DEBT

The following table summarizes debt as of May 31:



	Carrying Value			Fair Value			Carrying Value			Fair Value
	2014						2013
Loan Agreement:
Revolving Loan (interest rate of 1.3%)	$	120.0		$	120.0		$	—		$	—
Unsecured Lines of Credit (weighted average interest rates of 2.3% and 9.0%, respectively)	$	15.8		$	15.8		$	2.0		$	2.0
Total debt	$	135.8		$	135.8		$	2.0		$	2.0
Less lines of credit and current portion of long-term debt	(15.8		)	(15.8		)	(2.0		)	(2.0		)
Total long-term debt	$	120.0		$	120.0		$	—		$	—

The short-term debt’s carrying value approximates its fair value. The fair values of the 5% Notes were estimated based on market quotes, where available, or dealer quotes.

The following table sets forth the maturities of the carrying values of the Company’s debt obligations as of May 31, 2014 for the fiscal years ending May 31:



2015	$	15.8
2016	—
2017	—
2018	120.0
2019	—
Thereafter	—
Total debt	$	135.8

Loan Agreement

Scholastic Corporation and Scholastic Inc. (each, a “Borrower” and together, the “Borrowers”) are parties to a $425.0 credit facility with certain banks (as amended, the “Loan Agreement”), which allows the Company to borrow, repay or prepay and reborrow at any time prior to the December 5, 2017 maturity date. Under the Loan Agreement, interest on amounts borrowed thereunder is due and payable in arrears on the last day of the interest period (defined as the period commencing on the date of the advance and ending on the last day of the period selected by the Borrower at the time each advance is made). The interest pricing under the Loan Agreement is dependent upon the Borrower’s election of a rate that is either:


•	A Base Rate equal to the higher of (i) the prime rate, (ii) the prevailing Federal Funds rate plus 0.500% or (iii) the Eurodollar Rate for a one month interest period plus 1% plus, in each case, an applicable spread ranging from 0.18% to 0.60%, as determined by the Company’s prevailing consolidated debt to total capital ratio.

-or-


•	A Eurodollar Rate equal to the London interbank offered rate (LIBOR) plus an applicable spread ranging from 1.18% to 1.60%, as determined by the Company’s prevailing consolidated debt to total capital ratio.

As of May 31, 2014, the indicated spread on Base Rate Advances was 0.18% and the indicated spread on Eurodollar Rate Advances was 1.18%, both based on the Company’s prevailing consolidated debt to total capital ratio.

The Loan Agreement also provides for the payment of a facility fee ranging from 0.20% to 0.40% per annum based upon the Company’s prevailing consolidated debt to total capital ratio. At May 31, 2014, the facility fee rate was 0.20%.

As of May 31, 2014, the Company’s outstanding borrowings under the Loan Agreement totaled $120.0. The Company incurred this obligation in the third quarter of fiscal 2014 to partially finance the purchase of the land and building comprising a previously leased property at 555 Broadway in New York City. While this obligation is not due until the December 5, 2017 maturity date, the Company may, from time to time, make payments to reduce this obligation when cash from operations becomes available for this purpose.

No borrowings were outstanding under the Loan Agreement as of May 31, 2013.

At May 31, 2014, the Company had open standby letters of credit totaling $5.3 issued under certain credit lines, including $0.4 under the Loan Agreement discussed above and $4.9 under the domestic credit lines discussed below. A $1.0 standby letter of credit under the Loan Agreement was canceled on February 28, 2014 due to the purchase of the building mentioned above. These letters of credit are scheduled to expire within one year; however, the Company expects that substantially all of these letters of credit will be renewed, at similar terms, prior to expiration.

The Loan Agreement contains certain covenants, including interest coverage and leverage ratio tests and certain limitations on the amount of dividends and other distributions, and at May 31, 2014, the Company was in compliance with these covenants.

Lines of Credit

As of May 31, 2014, the Company’s domestic credit lines available under unsecured money market bid rate credit lines totaled $5.1. There was $10.0 of outstanding borrowings under these credit lines at May 31, 2014, and no outstanding borrowings as of May 31, 2013. The weighted average interest rate on these outstanding borrowings is 1.2%. All loans made under these credit lines are at the sole discretion of the lender and at an interest rate and term agreed to at the time each loan is made, but not to exceed 365 days. These credit lines may be renewed, if requested by the Company, at the option of the lender.

As of May 31, 2014, the Company had various local currency credit lines, with maximum available borrowings in amounts equivalent to $34.6, underwritten by banks primarily in the United States, Canada and the United Kingdom. These credit lines are typically available for overdraft borrowings or loans up to 364 days and may be renewed, if requested by the Company, at the sole option of the lender. There were borrowings outstanding under these facilities equivalent to $5.8 at May 31, 2014 at a weighted average interest rate of 4.3%, compared to borrowings outstanding equivalent to $2.0 at May 31, 2013 at a weighted average interest rate of 9.0%.

5% Notes due 2013

In April 2003, Scholastic Corporation issued $175.0 of 5% Notes due April 2013 (the “5% Notes”). The Company amended its existing Loan Agreement, which was scheduled to mature on June 1, 2014, to extend the maturity date to December 5, 2017, and on April 15, 2013, the Company drew under the Loan Agreement to satisfy its obligations to fully repay the 5% Notes. As of May 31, 2013, the Company had fully paid down its borrowing under the Loan Agreement.