Note K: Short-term Financing



The Company maintains credit facilities, letters of credit, and lines of credit as part of its normal and recurring business operations.



Credit Facilities:  The Company maintains three committed, unsecured credit facilities, as follows:





For all credit facilities, obligations under any facility are guaranteed by the Company and certain of its subsidiaries and will bear interest at competitive rates based on options provided to the borrower.  Upon the expiration date, any borrowings outstanding will mature and be payable on such date.



JPM $1 Billion Credit Facility: There were no borrowings outstanding under this credit facility as of February 28, 2018 or May 31, 2017.  Details of borrowings under this credit facility during the three and nine months ended February 28, 2018 and February 28, 2017 are as follows:







The Company typically borrows on an overnight basis. In addition to overnight borrowings, during the nine months ended February 28, 2018, the Company borrowed $100.0 million for a three-day period at a weighted-average interest rate of 4.25%.  During the three months ended February 28, 2017, the Company borrowed $50.0 million for eight days at a weighted average LIBOR-based interest rate of 1.44%.  During the nine months ended February 28, 2017, the Company borrowed $150.0 million for seven days and $50.0 million for 18 days at a weighted-average LIBOR-based interest rate of 1.40%.



JPM $500 Million Credit Facility:  There were no borrowings outstanding under this credit facility as of February 28, 2018.  During the nine months ended February 28, 2018, the Company borrowed against this credit facility for the first time.  Details of borrowings under this credit facility during the three and nine months ended February 28, 2018 are as follows: 







In addition to overnight borrowings, during the three months ended February 28, 2018, the Company borrowed $75.0 million for 19 days at a weighted-average LIBOR-based interest rate of 2.19%.  During the nine months ended February 28, 2018, the Company borrowed $300.0 million for seven days and $75.0 million for 30 days at weighted average LIBOR-based interest rates of 2.13% and 2.19%, respectively.



PNC $150 Million Credit Facility:  As of February 28, 2018, the Company had $57.7 million outstanding under this credit facility, which remains outstanding as of the date of this report.  There were no borrowings outstanding under this credit facility as of May 31, 2017.  Details of borrowings under this credit facility during the three and nine months ended February 28, 2018 and February 28, 2017, are as follows:





All of the Company’s credit facilities contain various financial and operational covenants that are usual and customary for such arrangements. The Company was in compliance with all of these covenants as of February 28, 2018.

Certain lenders under these credit facilities, and their respective affiliates, have performed, and may in the future perform for the Company, various commercial banking, investment banking, underwriting, and other financial advisory services, for which they have received, and will continue to receive in the future, customary fees and expenses.



Letters of credit: The Company had irrevocable standby letters of credit outstanding totaling $56.8 million and $47.3 million as of February 28, 2018 and May 31, 2017, respectively, required to secure commitments for certain insurance policies. The letters of credit expire at various dates between April 2018 and December 2018.  No amounts were outstanding on these letters of credit as of or during the nine months ended February 28, 2018 and February 28, 2017, or as of May 31, 2017.

Lines of credit: Effective August 17, 2017, the Company terminated four uncommitted, secured, short-term lines of credit totaling $900.0 million.  The lines of credit were available to the Company at market rates of interest and were primarily used to meet short-term funding requirements related to deposit account overdrafts and client fund obligations arising from electronic payment transactions on behalf of clients in the ordinary course of business.  There were no amounts outstanding under these lines of credit during the nine months ended February 28, 2018 and February 28, 2017, or as of May 31, 2017.  The Company does not have any other open lines of credit as of the date of this report.