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Debt and Other Obligations
 12 Months Ended
Sep. 30, 2025
Debt Disclosure [Abstract]  
Debt and Other Obligations

Note H. Debt and Other Obligations

Short-term Borrowings

Commercial Paper— The Company has a commercial paper program and the maximum aggregate balance of commercial paper notes outstanding and the amounts borrowed under the revolving credit facility may not exceed the borrowing capacity of $1 billion under the revolving credit facility. The proceeds from the issuance of the commercial paper have been used for general corporate purposes, which may include working capital, refinancing existing indebtedness, capital expenditures, share repurchases, and acquisitions. The revolving credit facility is available to repay the outstanding commercial paper, if necessary.

There was an outstanding balance of commercial paper of $6 million as of September 30, 2025 with a weighted average interest rate of 4.26% and an outstanding balance of commercial paper of $45 million as of September 30, 2024 with a weighted average interest rate of 4.94%

Other — During fiscal 2025, PT Cabot Indonesia entered into an $8 million corporate facility that can be used for short term working capital needs. As of September 30, 2025, the outstanding balance was $8 million with an interest rate of 6.68%.

Long-term Obligations

The Company’s long-term obligations, the fiscal year in which they mature and their respective interest rates are summarized below:

 

 

 

September 30

 

 

 

2025

 

 

2024

 

 

 

(In millions)

 

Variable Rate Debt:

 

 

 

 

 

 

Revolving Credit Facility, expires fiscal 2027

 

$

—

 

 

$

—

 

Revolving Credit Facility - Euro, expires fiscal 2027

 

 

130

 

 

 

113

 

Total variable rate debt

 

 

130

 

 

 

113

 

Fixed Rate Debt:

 

 

 

 

 

 

3.4% Notes due fiscal 2026

 

 

250

 

 

 

250

 

4.0% Notes due fiscal 2029

 

 

300

 

 

 

300

 

5.0% Notes due fiscal 2032

 

 

400

 

 

 

400

 

Medium-Term Notes due fiscal 2028, 6.57% — 7.28%

 

 

8

 

 

 

8

 

Chinese Renminbi Debt, due fiscal 2026, 4.3%

 

 

4

 

 

 

4

 

Total fixed rate debt

 

 

962

 

 

 

962

 

Finance lease obligations (Note R)

 

 

30

 

 

 

27

 

Unamortized debt issuance costs and debt discount

 

 

(6

)

 

 

(7

)

Total debt

 

 

1,116

 

 

 

1,095

 

Less Current portion of long-term debt

 

 

260

 

 

 

8

 

Total long-term debt

 

$

856

 

 

$

1,087

 

 

Revolving Credit Facility, expiring fiscal 2027—In August 2021, the Company entered into a revolving credit agreement (the “U.S. Credit Agreement”) with a loan commitment not to exceed $1 billion. The U.S. Credit Agreement supports the Company’s issuance of commercial paper, and borrowings may be used for working capital, letters of credit and other general corporate purposes. Outstanding commercial paper balances reduce the amount available for borrowing under the U.S. Credit Agreement, which was $994 million as of September 30, 2025. The U.S. Credit Agreement, which matures in August 2027, contains affirmative and negative covenants, the financial debt covenant described below, and annual sustainability performance targets related to the Company’s reduction in its nitrogen oxide and sulfur dioxide emissions intensity, the achievement of which may adjust pricing under the U.S. Credit Agreement. The borrowing rate is currently based on an adjusted daily risk-free borrowing rate, plus a Cabot-specific spread based on the Company’s credit rating and achievement of the annual sustainability performance targets. Based on the performance against the sustainability performance targets during calendar year 2024, there is no adjustment to commitment fee and borrowing rate, effective July 2025 through August 2026.

Revolving Credit Facility-Euro, expiring fiscal 2027—In May 2023, several subsidiaries entered into a revolving credit agreement (the “Euro Credit Agreement”, and together with the U.S. Credit Agreement, the "Credit Agreements") with a loan commitment not to exceed 300 million Euros. The amount available for borrowing under this revolving credit agreement was $223 million as of September 30, 2025, and the weighted average interest rate on the outstanding balance during the year was 4.27%. The borrowing rate is based on an adjusted daily risk-free borrowing rate, plus a Cabot-specific spread based on the Company’s credit rating. The revolving credit agreement, which matures in August 2027, may be used for repatriation of earnings of Cabot’s foreign subsidiaries to the U.S., the repayment of indebtedness of the Company’s foreign subsidiaries owing to the Company or any of its subsidiaries, and for working capital and general corporate purposes. The obligations of the subsidiaries under the revolving credit agreement are guaranteed by the Company. The Company paid debt issuance costs of $1 million upon entering the agreement, which are being amortized over the life of the revolver.

Debt Covenants—As of September 30, 2025, Cabot was in compliance with the financial debt covenants under the Credit Agreements, which, with limited exceptions, require us to comply on a quarterly basis with a leverage test requiring the ratio of consolidated net debt to consolidated EBITDA not to exceed 3.50 to 1.00. Consolidated net debt is defined as consolidated debt offset by the lessor of (i) unrestricted cash and cash equivalents and (ii) $150 million.

Chinese Renminbi Debt—The Company’s consolidated Chinese subsidiaries had $4 million of unsecured long-term debt outstanding with a noncontrolling shareholder of a consolidated subsidiary as of both September 30, 2025 and 2024.

3.4% Notes due fiscal 2026—In September 2016, Cabot issued $250 million in registered notes with a coupon of 3.4% that mature on September 15, 2026. These notes are unsecured and pay interest on March 15 and September 15. The net proceeds of this offering were $248 million after deducting discounts and issuance costs. The discount of less than $1 million was recorded at issuance and is being amortized over the life of the notes. The Company plans to refinance the notes prior to the notes’ maturity in fiscal 2026.

4.0% Notes due fiscal 2029—In June 2019, Cabot issued $300 million in registered, unsecured notes with a coupon of 4.0% that mature on July 1, 2029. Interest is payable under the notes semi-annually on January 1 and July 1. The net proceeds of this offering were $296 million after deducting discounts and issuance costs of $1 million and $3 million, respectively, which were paid at issuance and are being amortized over the life of the notes.

5.0% Notes due fiscal 2032—In June 2022, Cabot issued $400 million in unsecured notes with a coupon of 5% that mature on June 30, 2032. Interest is payable semi-annually on June 30 and December 30. The net proceeds of this offering were $394 million after deducting discounts and issuance costs, each of which were $3 million, which were paid at issuance and are being amortized over the life of the notes.

Medium-Term Notes—At both September 30, 2025 and 2024, there were $8 million of unsecured medium-term notes outstanding issued to numerous lenders with various fixed interest rates and maturity dates. The weighted average maturity of the total outstanding medium-term notes is 2 years with a weighted average interest rate of 7.24%.

Finance Lease obligations—See Note R for a discussion of the Company’s leases.

Future Years Payment Schedule

The aggregate principal amounts of long-term debt, excluding finance lease liabilities presented separately in Note R, due in each of the five years from fiscal 2026 through 2030 and thereafter are as follows:

 

Years Ending September 30

 

Principal Payments
on Long-Term
Debt

 

 

 

(In millions)

 

2026

 

$

254

 

2027

 

 

129

 

2028

 

 

9

 

2029

 

 

300

 

2030

 

 

—

 

Thereafter

 

 

400

 

Total

 

$

1,092

 

 

Standby letters of credit—At September 30, 2025, the Company had provided standby letters of credit that were outstanding and not drawn totaling $7 million, which expire through fiscal 2026.