Debt

9 Months Ended

Jun. 30, 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 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. See below for additional information regarding changes to certain facilities.

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

	June 30, 2022		September 30, 2021
Public bonds due fiscal 2023 to 2028	$	3,432.4	$	3,778.2
Public bonds due fiscal 2029 to 2033		2,756.7		2,766.5
Public bonds due fiscal 2037 to 2047		177.9		178.2
Term loan facilities		599.1		598.9
Revolving credit and swing facilities		170.0		270.0
Receivables securitization		120.0		—
Commercial paper		182.8		—
Finance lease obligations		257.0		264.1
Vendor financing and commercial card    programs		120.2		113.1
International and other debt		206.8		225.1
Total debt		8,022.9		8,194.1
Less: current portion of debt		387.8		168.8
Long-term debt due after one year	$	7,635.1	$	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 June 30, 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 $7.9 billion as of June 30, 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 July 7, 2022, we terminated our then-existing $2.3 billion unsecured revolving credit facility entered into on July 1, 2015 and as had been subsequently amended as well as the commitments thereunder (the “Prior Revolving Credit Facility”). At June 30, 2022 and September 30, 2021, there were no amounts outstanding under the facility.

On the same date, we entered into a five-year senior unsecured revolving credit facility in an aggregate amount of $2.3 billion, consisting of a $1.8 billion U.S. revolving facility and a $500 million multicurrency revolving facility (collectively, the “Revolving Credit Facility”) with Wells Fargo Bank, National Association, as administrative agent and multicurrency agent. The Revolving Credit Facility is guaranteed by WestRock Company and certain of its subsidiaries as set forth in the credit agreement.

Loans under the Revolving Credit Facility may be drawn in U.S. dollars, Canadian dollars, Euro and Pounds Sterling. At our option, loans under the Revolving Credit Facility will bear interest at (a) in the case of loans denominated in U.S. dollars, either Term SOFR or an alternate base rate, (b) in the case of loans denominated in Canadian dollars, one of CDOR, the U.S. Base Rate or the Canadian Prime Rate, (c) in the case of loans denominated in Euro, EURIBOR and (d) in the case of loans denominated in Pounds Sterling, SONIA, in each case plus an applicable interest rate margin that will fluctuate between 0.875% per annum and 1.500% per annum (for Term SOFR loans, CDOR loans, EURIBOR loans and SONIA loans) or between 0.000% per annum and 0.500% per annum (for alternate base rate loans, U.S. Base Rate loans and Canadian Prime Rate loans), based upon the Company’s corporate credit ratings or the Leverage Ratio (as each of these terms is defined in the Revolving Credit Agreement) whichever yields a lower applicable interest rate margin at such time. Term SOFR loans will be subject to a credit spread adjustment equal to 0.10% per annum. In addition, unused revolving commitments under the Revolving Credit Facility will accrue a commitment fee that will fluctuate between 0.080% per annum and 0.225% per annum, based upon the Company’s corporate credit ratings or the Leverage Ratio (whichever yields a lower applicable commitment fee rate) at such time.

Farm Loan Credit Facility

On September 27, 2019, we entered into a credit agreement (and as subsequently amended, the “Prior Farm Loan Credit Agreement”) with CoBank ACB, as administrative agent, that replaced our then-existing facility. The Prior Farm Loan Credit Agreement provided for a seven-year senior unsecured term loan in an aggregate principal amount of $600 million (the “Prior Farm Loan Credit Facility”). The Prior Farm Loan Credit Facility was guaranteed by WestRock Company and certain of its subsidiaries as set forth in the credit agreement. The carrying value of this facility at June 30, 2022 and September 30, 2021 was $599.1 million and $598.9 million, respectively.

On July 7, 2022, we entered into an amended and restated credit agreement that amends and restates the Prior Farm Loan Credit Agreement (the “Restated Farm Credit Facility Agreement”) with CoBank, ACB, as administrative agent. The Restated Farm Credit Facility Agreement provides for a seven-year senior unsecured term loan facility in an aggregate principal amount of $600 million (the “Restated Farm Credit Facility”). At any time, we have the ability to increase the principal amount by up to $400 million by written notice. The Restated Farm Credit Facility is guaranteed by WestRock Company and certain of its subsidiaries as set forth in the credit agreement.

At our option, loans issued under the Restated Farm Credit Facility will bear interest at either Term SOFR or an alternate base rate, in each case plus an applicable interest rate margin that will fluctuate between 1.650% per annum and 2.275% per annum (for Term SOFR loans) or between 0.650% per annum and 1.275% per annum (for alternate base rate loans), based upon the Company’s corporate credit ratings or the Leverage Ratio (as each of these terms is defined in the Restated Farm Credit Facility Agreement) whichever yields a lower applicable interest rate margin at such time. In addition, Term SOFR loans will be subject to a credit spread adjustment equal to 0.10% per annum.

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 June 30, 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 June 30, 2022 and September 30, 2021 were approximately $1,423.0 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 June 30, 2022 there was $120.0 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 July 7, 2022, we terminated our then-existing three-year unsecured €600.0 million European revolving credit facility with Coöperatieve Rabobank U.A., New York Branch, as administrative agent, entered into on February 26, 2021 and as subsequently amended. At June 30, 2022, we had borrowed $170.0 million under this facility and entered into foreign currency exchange contracts of $170.4 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.

On the same date, we entered into a credit agreement (the "Rabobank Credit Agreement") with Coöperatieve Rabobank U.A., New York Branch, as administrative agent. The Rabobank Credit Agreement provides for a three-year senior unsecured revolving credit facility in an aggregate amount of €700.0 million and includes an incremental €100.0 million accordion feature (the “Rabobank Credit Facility”) The Rabobank Credit Facility is guaranteed by WestRock Company and certain of its subsidiaries as set forth in the credit agreement.

Loans under the Rabobank Credit Facility may be drawn in U.S. dollars, Euro and Pounds Sterling. At our option loans under the Rabobank Credit Facility will bear interest at (a) in the case of loans denominated in U.S. dollars, either Term SOFR or an alternate base rate, (b) in the case of loans denominated in Euro, EURIBOR and (c) in the case of loans denominated in Pounds Sterling, SONIA, in each case plus an applicable interest rate margin that will fluctuate between 0.875% per annum and 1.625% per annum (for Term SOFR loans, EURIBOR loans and SONIA loans) or between 0.000% per annum and 0.625% per annum (for alternate base rate loans), based upon the Company’s corporate credit ratings at such time. Term SOFR loans will be subject to a credit spread adjustment equal to 0.10% per annum. In addition, unused revolving commitments under the Rabobank Credit Facility will accrue a commitment fee that will fluctuate between 0.100% per annum and 0.275% per annum, based upon the Company’s corporate credit ratings at such time. Loans under the Rabobank Credit Facility may be prepaid at any time without premium.

Commercial Paper

On December 7, 2018, we established a new unsecured commercial paper program with WRKCo Inc. ("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 (and, prior to July 7, 2022, the Prior Revolving Credit Facility was) 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 June 30, 2022, we had issued $182.8 million in commercial paper. At September 30, 2021, there was no amount outstanding.