Debt and Credit Agreements

12 Months Ended

Dec. 31, 2024

Debt Disclosure [Abstract]

Debt and Credit Agreements

14. Debt and Credit Agreements

SHORT-TERM DEBT

As of December 31, 2024 and 2023, total short-term debt was $387 million and 538 million, respectively. As of December 31, 2024, short-term debt consisted mainly of a $273 million Swedish Export Credit Corporation loan, and $90 million commercial papers.

The Company’s subsidiaries have credit agreements, principally in the form of overdraft facilities with several local banks. Total available short-term facilities as of December 31, 2024, excluding commercial paper facilities as described below, amounted to $428 million, of which approximately $24 million was utilized. The weighted average interest rate on total short-term debt outstanding at December 31, 2024 and 2023, excluding the short-term portion of long-term debt, was 5% and 6%, respectively.

LONG-TERM DEBT

As of December 31, 2024 and 2023, total long-term debt was 1,522 million and 1,324 million, respectively.

In February 2024, the Company priced and issued a 5.5-year green bond for a total of €500 million in the Eurobond market. The bond carries a coupon of 3.625% and matures in August 2029.

In March 2023, the Company priced and issued a 5-year green bond for a total of €500 million in the Eurobond market. The bond carries a coupon of 4.25% and matures in March 2028.

In June 2020, the Company utilized its SEK 3,000 million facility with Swedish Export Credit Corporation which was signed in May 2020. The SEK 3,000 million facility matures in 2025 and carries a floating interest rate of 3M STIBOR +1.85%.

In 2014, the Company issued long-term debt securities in a U.S. Private Placement. As of December 31, 2024, the total long-term debt outstanding from the 2014 issuance of $470 million consist of $285 million aggregate principal amount of 12-year senior notes with an interest rate of 4.24%, and $185 million aggregate principal amount of 15-year senior notes with an interest rate of 4.44%.

CREDIT FACILITIES

In July 2024, the Company entered into an $125 million bilateral revolving credit facility (Bilateral RCF) with substantially the same terms as the RCF with the 11 banks (see below). As of December 31, 2024 this facility was not utilized.

In May 2022, the Company refinanced its existing revolving credit facility (RCF) of $1,100 million. The facility was syndicated among 11 banks and matures in May 2029. The Company pays a commitment fee on the undrawn amount of 0.10%, representing 35% of the applicable margin, which is 0.275% (given the Company’s ratings of “BBB+ from Fitch and “Baa1” from Moody’s). Borrowings under the facility are unsecured. As of December 31, 2024 this facility was not utilized.

The Company has a €3,000 million Euro Medium Term Note Program in place for being able to issue notes to be traded on the Global Exchange Market of Euronext Dublin. At December 31, 2024, €1,000 million had been issued under this program (see long-term debt above).

The Company has a $1.0 billion US commercial paper program and a SEK 7 billion (approx. $636 million) Swedish commercial paper program. At December 31, 2024 the amount outstanding under these programs were $90 million and SEK 0 million, respectively.

The Company is not subject to any financial covenants, i.e., performance related restrictions, in any of its significant long-term borrowings or commitments.

CREDIT RISK

In the Company’s financial operations, credit risk arises in connection with cash deposits with banks and when entering into forward exchange agreements, swap contracts or other financial instruments. In order to reduce this risk, deposits and financial instruments are only entered with a limited number of banks up to a calculated risk amount of $250 million per bank for banks rated A- or above and up to $50 million for banks rated BBB+. The policy of the Company is to work with banks that have a strong credit rating and that participate in the Company’s financing. In addition to this, deposits of up to an aggregate amount of $2 billion can be placed in U.S. and Swedish government paper and in certain AAA rated money market funds. As of December 31, 2024, the Company had placed $31 million in money market funds.

The table below shows debt maturity as cash flow. For a description of hedging instruments used as part of debt management, see the Financial Instruments section of Note 2 and Note 4.

DEBT PROFILE

													Total
PRINCIPAL AMOUNT BY EXPECTED MATURITY (dollars in millions)	2025		2026		2027		2028		2029		Thereafter		long- term		Total
Bonds	$	—	$	285	$	—	$	521	$	706	$	—	$	1,512	$	1,512
Loans		273		—		10				—		—		10		283
Commercial papers		90		—		—		—		—		—		—		90
Other short-term debt		24		—		—		—		—		—		—		24
Total principal amount	$	387	$	285	$	10	$	521	$	706	$	—	$	1,522	$	1,909