Debt

3 Months Ended

Dec. 31, 2024

Debt Disclosure [Abstract]

Debt

DEBT

The following table summarizes Valvoline’s total debt as of:

(In millions)	December 31 2024		September 30 2024
2031 Notes	$	535.0	$	535.0
Term Loan	433.4		439.4
Revolver (a)	70.0		125.0
Debt issuance costs and discounts	(5.3)		(5.6)
Total debt	1,033.1		1,093.8
Current portion of long-term debt	23.8		23.8
Long-term debt	$	1,009.3	$	1,070.0

(a)As of December 31, 2024, the total borrowing capacity remaining under the $475.0 million revolving credit facility was $401.5 million due to a reduction of $70.0 million from borrowings and $3.5 million for letters of credit outstanding.

Covenants and guarantees

The Company guaranteed future payments related to certain lease assignments in connection with refranchising retail stores and selling the Global Products business. Valvoline is obligated to perform if the buyers of the divested businesses default on the leases, which have remaining terms ranging from one to 16 years. The undiscounted maximum potential future payments under the lease guarantees were $69.8 million as of December 31, 2024. In addition, the Company guarantees certain outstanding franchisee debt obligations that have remaining terms ranging from one month to five years and total $14.0 million as of December 31, 2024. The Company has not recorded a liability for these guarantees as the likelihood of making future payments is not considered probable.

As of December 31, 2024, Valvoline was in compliance with all covenants under its long-term borrowings.