Annual report pursuant to Section 13 and 15(d)

Long-Term Financing

Long-Term Financing
12 Months Ended
May 31, 2019
Financing [Abstract]  
Long-Term Financing

Note N — Long-term Financing

On March 13, 2019, the Company and its Paychex of New York LLC (“PoNY”) subsidiary completed the private placement of Senior Notes, Series A in an aggregate principal amount of $400.0 million due on March 13, 2026, and Senior Notes, Series B in an aggregate principal amount of $400.0 million due on March 13, 2029 (collectively the “Notes”), pursuant to its Note Purchase and Guarantee Agreement (the “Agreement”) among the Company, PoNY, and the respective purchasers.  Proceeds from the Notes were used to pay off $800.0 million in short-term borrowings under the Company’s JPM credit facilities used to temporarily finance the acquisition of Oasis.

Long-term debt, at amortized cost, consisted of the following:








May 31,

In millions



Senior Notes, Series A




Senior Notes, Series B




Total long-term borrowings




Less: Debt issuance costs, net of accumulated amortization




Long-term borrowings, net of debt issuance costs




There was no long-term debt outstanding as of May 31, 2018.

Certain information related to the Senior Notes are as follows:







Senior Notes

Senior Notes



Series A

Series B

Stated interest rate





Effective interest rate





Interest rate type





Interest payment dates



Semi-annual, in arrears

Semi-annual, in arrears

Principal payment dates



March 13, 2026

March 13, 2029

Note type





The effective interest rates for each note series includes the interest on the note and amortization of debt issuance costs.

Payment of all amounts due with respect to the Notes and performance under the Agreement is guaranteed by the Company, PoNY and certain other subsidiaries of the Company.  The Company may, at its option, prepay at any time all, or any part of, the Notes, subject to certain conditions as described in the Agreement.

The Agreement contains customary representations, warranties, affirmative and negative covenants, including financial covenants that are usual and customary for such arrangements. The Company was in compliance with all of these covenants as of May 31, 2019.