Quarterly report [Sections 13 or 15(d)]

Note 9 - Debt

v3.25.1
Note 9 - Debt
 3 Months Ended
Mar. 31, 2025
Notes to Financial Statements  
Debt Disclosure [Text Block]

9. DEBT 

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Our outstanding debt, net of debt issuance costs, of consolidated entities consisted of the following (dollars in millions):

​

   

March 31,

    

December 31,

  
   

2025

    

2024

  

Senior credit facilities:

                

Revolving credit facility

   $ 273     $ —  

Senior notes

     1,486       1,799  

Amounts outstanding under A/R programs

     163       —  

Variable interest entities

     14       16  

Other

     18       20  

Total debt

   $ 1,954     $ 1,835  

Current portion of debt

   $ 284     $ 325  

Long-term portion of debt

     1,670       1,510  

Total debt

   $ 1,954     $ 1,835  

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Direct and Subsidiary Debt

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Substantially all of our debt, including the facilities described below, has been incurred by our subsidiaries (primarily Huntsman International). Huntsman Corporation is not a guarantor of such subsidiary debt.

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Certain of our subsidiaries have third-party debt agreements that contain certain restrictions with regard to dividends, distributions, loans or advances. In certain circumstances, the consent of a third party would be required prior to the transfer of any cash or assets from these subsidiaries to us.

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Revolving Credit Facility

 

On May 20, 2022, Huntsman International entered into a $1.2 billion senior unsecured revolving credit facility (the “2022 Revolving Credit Facility”). Borrowings bear interest at the rates specified in the credit agreement governing the 2022 Revolving Credit Facility, which vary based on the type of loan and Huntsman International’s debt ratings. Under the credit agreement, the interest rate margin and the commitment fee rates are also subject to adjustments based on the Company’s performance on specified sustainability target thresholds with respect to annual percentage reduction in operational greenhouse gas emissions intensity and annual percentage reduction in water consumption intensity. Unless previously terminated in accordance with its terms, the 2022 Revolving Credit Facility will mature in May 2027. Huntsman International may increase the 2022 Revolving Credit Facility commitments up to an additional $500 million, subject to the satisfaction of certain conditions. 

 

On February 12, 2025, Huntsman International entered into a First Amendment to the 2022 Revolving Credit Facility (the “First Amendment”). The First Amendment amends the financial covenant regarding the leverage ratio of Huntsman International and its subsidiaries to increase the maximum permitted ratio of Consolidated Net Debt to Consolidated EBITDA (as those terms are defined in the 2022 Revolving Credit Facility) through the quarter ending December 31, 2025.

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The following table presents certain amounts under our 2022 Revolving Credit Facility as of  March 31, 2025 (monetary amounts in millions):

 

                     

Unamortized

                
                     

discounts and

                
   

Committed

    

Principal

      

debt issuance

    

Carrying

        

Facility

  

amount

    

outstanding

      

costs

    

value

  

Interest rate(2)

  

Maturity

2022 Revolving Credit Facility

   $ 1,200     $ 273  

(1)

   $ —     $ 273  

Term Secured Overnight Financing Rate (“SOFR”) plus 1.475%

  

May 2027

 

(1)

On March 31, 2025, we had an additional $3 million (U.S. dollar equivalent) of letters of credit and bank guarantees issued and outstanding under our 2022 Revolving Credit Facility.

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(2)

Interest rates on borrowings under the 2022 Revolving Credit Facility vary based on the type of loan and Huntsman International’s debt ratings. The representative interest rate for U.S. dollar borrowings as of March 31, 2025 was 1.475% above Term SOFR.

 

Senior Notes

 

On  March 28, 2025, we satisfied and discharged our obligations under the indenture governing our 4.25% senior notes due April 2025 (“2025 Senior Notes”) by irrevocably depositing funds sufficient to redeem them in full, which was approximately $315 million, on the maturity date of April 1, 2025.

 

As of  March 31, 2025, our senior notes consisted of the following (monetary amounts in millions): 

 

                   

Unamortized

  
                   

premiums,

  
                   

discounts

  
                   

and debt

  

Notes

  

Maturity

  

Interest rate

    

Amount outstanding

  

issuance costs

  

2029 Senior notes

  

May 2029

     4.50 %  

$750 ($743 carrying value)

     7  

2031 Senior notes

  

June 2031

     2.95 %  

$400 ($398 carrying value)

     2  

2034 Senior notes

  

October 2034

     5.70 %  

$350 ($345 carrying value)

     5  

 

A/R Programs

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Our U.S. accounts receivable securitization program (“U.S. A/R Program”) and our European accounts receivable securitization program (“EU A/R Program” and collectively with the U.S. A/R Program, “A/R Programs”) are structured so that we transfer certain of our trade receivables to the U.S. special purpose entity (“U.S. SPE”) and the European special purpose entity (“EU SPE”) in transactions intended to be true sales or true contributions. The receivables collateralize debt incurred by the U.S. SPE and the EU SPE.

 

Information regarding our A/R Programs as of March 31, 2025 was as follows (monetary amounts in millions):

​

       

Maximum funding

    

Amount

      

Facility

  

Maturity

  

availability(1)

    

outstanding

    

Interest rate(2)

U.S. A/R Program

  

January 2027

   $ 150     $ 104  

(3)

Applicable rate plus 0.95%

EU A/R Program

  

July 2027

   € 100     € 55    

Applicable rate plus 1.45%
        (or approximately $108)     (or approximately $59)      

 

(1)

The amount of actual availability under our A/R Programs may be lower based on the level of eligible receivables sold, changes in the credit ratings of our customers, customer concentration levels and certain characteristics of the accounts receivable being transferred, as defined in the applicable agreements.

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(2)

The applicable rate for our U.S. A/R Program is defined by the lender as Term SOFR. The applicable rate for our EU A/R Program is either Term SOFR, EURIBOR or SONIA (Sterling Overnight Interbank Average Rate). 

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(3)

As of March 31, 2025, we had approximately $5 million (U.S. dollar equivalent) of letters of credit issued and outstanding under our U.S. A/R Program.

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As of March 31, 2025 and December 31, 2024, $271 million and $233 million, respectively, of accounts receivable were pledged as collateral under our A/R Programs.

 

 

Variable Interest Entity Debt

 

 As of  March 31, 2025, AAC, our consolidated 50%-owned joint venture, had $14 million outstanding under its loan commitments and debt financing arrangements. As of March 31, 2025, we have $9 million classified as current debt and $5 million as long-term debt on our condensed consolidated balance sheets. We do not guarantee these loan commitments, and AAC is not a guarantor of any of our other debt obligations.

 

Debt Issuance Costs

​

We record debt issuance costs related to a debt liability on the balance sheets as a reduction to the face amount of that debt liability. As of  March 31, 2025 and December 31, 2024, the amount of debt issuance costs directly reducing the debt liability was $8 million and $9 million, respectively. We amortize debt issuance costs using either a straight line or effective interest method, depending on the debt agreement, and record them as interest expense.​

 

Compliance with Covenants

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Our 2022 Revolving Credit Facility contains a financial covenant regarding the leverage ratio of Huntsman International and its subsidiaries. The 2022 Revolving Credit Facility also contains other customary covenants and events of default for credit facilities of this type. Upon an event of default that is not cured or waived within any applicable cure periods, in addition to other remedies that may be available to the lenders, the obligations under the 2022 Revolving Credit Facility may be accelerated.

 

The agreements governing our A/R Programs also contain certain receivable performance metrics. Any material failure to meet the applicable A/R Programs’ metrics could lead to an early termination event under the A/R Programs, which could require us to cease our use of such facilities, prohibiting us from additional borrowings against our receivables or, at the discretion of the lenders, requiring that we repay the A/R Programs in full. An early termination event under the A/R Programs would also constitute an event of default under our 2022 Revolving Credit Facility, which could require us to pay off the balance of the 2022 Revolving Credit Facility in full and could result in the loss of our 2022 Revolving Credit Facility. 

 

We believe that we are in compliance with the covenants contained in the agreements governing our material debt instruments, including our 2022 Revolving Credit Facility, our A/R Programs and our senior notes.​