Paychex, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Long-Term Financing

Long-Term Financing

12 Months Ended

May 31, 2023

Debt Disclosure [Abstract]

Long-Term Financing

Note M — Long-term Financing

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


	May 31,
In millions	2023			2022
Senior Notes, Series A	$	400.0		$	400.0
Senior Notes, Series B		400.0			400.0
Total long-term borrowings		800.0			800.0
Less: Debt issuance costs, net of accumulated amortization		(1.8	)		(2.3	)
Long-term borrowings, net of debt issuance costs	$	798.2		$	797.7

Certain information related to the Senior Notes, Series A and Senior Notes, Series B (collectively the “Notes”) issued pursuant to the Note Purchase and Guarantee Agreement (the “Agreement”) for fiscal 2023 and fiscal 2022 are as follows:


	Senior Notes	Senior Notes
	Series A	Series B
Stated interest rate	4.07%	4.25%
Effective interest rate	4.14%	4.31%
Interest rate type	Fixed	Fixed
Interest payment dates	Semi-annual, in arrears	Semi-annual, in arrears
Principal payment dates	March 13, 2026	March 13, 2029
Note type	Unsecured	Unsecured

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, Paychex of New York LLC, 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 these covenants as of May 31, 2023.