Debt

6 Months Ended

Mar. 31, 2022

Debt [Abstract]

Debt

Note 11. Debt

See “Note 13. Debt” of the Notes to Consolidated Financial Statements section in the Fiscal 2021 Form 10-K for additional information on our debt and interest rates on that debt. As noted below, we have been addressing the LIBOR transition in our applicable debt facilities and expect to complete the transition likely by the end of the current calendar year and in any event prior to the June 30, 2023 deadline when the remaining rates cease publication.

The following table shows the carrying value of the individual components of our debt (in millions):

	March 31, 2022		September 30, 2021
Public bonds due fiscal 2023 to 2028	$	3,431.3	$	3,778.2
Public bonds due fiscal 2029 to 2033		2,760.0		2,766.5
Public bonds due fiscal 2037 to 2047		178.0		178.2
Term loan facilities		599.0		598.9
Revolving credit and swing facilities		230.0		270.0
Receivables securitization		340.0		—
Commercial paper		224.6		—
Finance lease obligations		258.9		264.1
Vendor financing and commercial card    programs		118.3		113.1
International and other debt		233.9		225.1
Total debt		8,374.0		8,194.1
Less: current portion of debt		419.6		168.8
Long-term debt due after one year	$	7,954.4	$	8,025.3

A portion of the debt classified as long-term may be paid down earlier than scheduled at our discretion without penalty. Certain customary restrictive covenants govern our maximum availability under our credit facilities. We test and report our compliance with these covenants as required and were in compliance with all of our covenants at March 31, 2022.

On March 22, 2022, we redeemed $350 million aggregate principal amount of our 4.00% senior notes due March 2023 primarily using borrowings under our Receivables Securitization Facility (as hereinafter defined) and recorded an $8.2 million loss on extinguishment of debt.

The estimated fair value of our debt was approximately $8.6 billion as of March 31, 2022 and $9.0 billion at September 30, 2021. The fair value of our long-term debt is categorized as level 2 within the fair value hierarchy and is primarily either based on quoted prices for those or similar instruments, or approximate their carrying amount, as the variable interest rates reprice frequently at observable current market rates.

Revolving Credit Facility

On November 21, 2019, we amended our $2.0 billion unsecured revolving credit facility entered into on July 1, 2015 to, among other things, increase the committed principal to $2.3 billion, increase the maximum permitted Debt to Capitalization Ratio (as defined in the credit agreement) to 0.65:1.00 and extend its maturity date to November 21, 2024 (the “Revolving Credit Facility”). On December 7, 2021, we entered into an agreement to restrict us to U.S. and Canadian denominated borrowings and letters of credit under this facility. The agreement allows for the deferral of the LIBOR transition at this time and does not impact the overall availability of the facility. We intend to address the LIBOR transition at a later date. At March 31, 2022 and September 30, 2021, there were no amounts outstanding under the facility.

Term Loans

On September 27, 2019, one of our wholly-owned subsidiaries, WestRock Southeast, LLC, entered into a credit agreement (the “Farm Loan Credit Agreement”) with CoBank ACB, as administrative agent, that replaced our then-existing facility. The Farm Loan Credit Agreement provides for a seven-year senior unsecured term loan in an aggregate principal amount of $600.0 million (the “Farm Loan Credit Facility”). At any time, we may increase the

principal amount by up to $300.0 million by written notice. The Farm Loan Credit Facility is guaranteed by the Company, WRKCo Inc. and WestRock RKT, LLC (“RKT”) and WestRock MWV, LLC (“MWV”, and together with RKT, the Company and WRKCo Inc. the “Guarantor Subsidiaries”). The carrying value of this facility at March 31, 2022 and September 30, 2021 was $599.0 million and $598.9 million, respectively.

Receivables Securitization Facility

On March 12, 2021, we amended our existing $700.0 million receivables securitization agreement (the “Receivables Securitization Facility”), extended the maturity to March 11, 2024 and established the transition to the SOFR at a future date from a blend of the market rate for asset-backed commercial paper and the one-month LIBOR rate plus a credit spread, and revised certain fees. At March 31, 2022 and September 30, 2021, maximum available borrowings, excluding amounts outstanding under the Receivables Securitization Facility, were $700.0 million and $690.3 million, respectively. The carrying amount of accounts receivable collateralizing the maximum available borrowings at March 31, 2022 and September 30, 2021 were approximately $1,363.6 million and $1,318.4 million, respectively. We have continuing involvement with the underlying receivables as we provide credit and collections services pursuant to the Receivables Securitization Facility. At March 31, 2022 there was $340.0 million outstanding under this facility primarily as a result of the redemption of our senior notes discussed above. At September 30, 2021, there was no amount outstanding under this facility.

European Revolving Credit Facility

On December 1, 2021, we amended our existing European revolving credit facility with Coöperatieve Rabobank U.A., New York Branch, as administrative agent entered into on February 26, 2021. We maintained the facility at €600.0 million as well as the incremental €100.0 million accordion feature. The amendment addressed the LIBOR transition for the British Pound that will now be indexed with the Sterling Secured Overnight rate ("SONIA"). This facility provides for a three-year unsecured U.S. dollar, Euro and British Pound denominated borrowing of not more than €600.0 million maturing on February 26, 2024. At March 31, 2022, we had borrowed $230.0 million under this facility and entered into foreign currency exchange contracts of $230.3 million as an economic hedge for the U.S. dollar denominated borrowing plus interest by a non-U.S. dollar functional currency entity. The net of gains or losses from these foreign currency exchange contracts and the changes in the remeasurement of the U.S. dollar denominated borrowing in our foreign subsidiaries have been immaterial to our condensed consolidated statements of income. At September 30, 2021, we had borrowed $270.0 million under this facility.

Commercial Paper

On December 7, 2018, we established a new unsecured commercial paper program with WRKCo as the issuer. Under the program, we may issue short-term unsecured commercial paper notes in an aggregate principal amount at any time not to exceed $1.0 billion with up to 397-day maturities. The program has no expiration date and can be terminated by either the agent or us with not less than 30 days’ notice. Our Revolving Credit Facility is intended to backstop the commercial paper program. Amounts available under the program are expected to be used for general corporate purposes and may be borrowed, repaid and re-borrowed from time to time. At March 31, 2022, we had issued $224.6 million in commercial paper. At September 30, 2021, there was no amount outstanding.