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Long-Term Debt | 3 Months Ended
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Mar. 31, 2025
Debt Disclosure [Abstract] |
Long-Term Debt | Long-Term Debt The following is a summary of Organon’s total debt:
($ in millions) | March 31, 2025 |  | December 31, 2024
Term Loan B Facility: |  |  |
SOFR plus 225 bps term loan due 2031 | $ | 1,543 |  |  | $ | 1,543 |
EURIBOR plus 275 bps euro-denominated term loan due 2031 (€722 million in 2025 and €724 million in 2024) | 779 |  |  | 755 |
4.125% secured notes due 2028 | 2,100 |  |  | 2,100 |
2.875% euro-denominated secured notes due 2028 (€1.25 billion) | 1,348 |  |  | 1,304 |
5.125% notes due 2031 | 2,000 |  |  | 2,000 |
6.750% secured notes due 2034 | 500 |  |  | 500 |
7.875% notes due 2034 | 500 |  |  | 500 |
Revenue Interest Purchase and Sale Agreement (1) | 169 |  |  | 165 |
NovaQuest Funding Agreement (1) | 103 |  |  | 103 |
Other borrowings | 7 |  |  | 7 |
Other (discounts and debt issuance costs) | (93) |  |  | (97) |
Total principal long-term debt | $ | 8,956 |  |  | $ | 8,880 |
Less: Current portion of long-term debt | 20 |  |  | 20 |
Total Long-term debt, net of current portion | $ | 8,936 |  |  | $ | 8,860 |
(1) Recognized at the amortized cost basis. The remaining principal is determined as the initial fair value less principal payments. As of March 31, 2025, the remaining principal of the revenue interest purchase and sale agreement (the “RIPSA”) the Company assumed in connection with its acquisition of Dermavant and the NovaQuest Co-Investment Fund VIII, L.P. (“NovaQuest”) debt is $156 million and $102 million, respectively. The nature and terms of Organon’s long-term debt are described in detail in Note 12. “Long-Term Debt and Leases” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. There were no outstanding balances under the Revolving Credit Facility as of March 31, 2025 or December 31, 2024. The Company borrowed $60 million on the Revolving Credit Facility in April 2025. Long-term debt was recorded at the carrying amount. The estimated fair value of long-term debt (including current portion) is as follows:
($ in millions) |  | Fair Value Measurement Level |  | March 31, 2025 |  | December 31, 2024
Long-term debt |  | 2 |  | $ | 8,273 |  |  | $ | 8,354 |
Long-term debt (RIPSA & NovaQuest) |  | 3 |  | 272 |  |  | 268 |
Level 2 was estimated using inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the liability. Level 3 was estimated using unobservable inputs. The Company made interest payments related to its debt instruments of $41 million for the three months ended March 31, 2025. The average maturity of the Company’s long-term debt as of March 31, 2025 is approximately 5.3 years and the weighted-average interest rate on total borrowings as of March 31, 2025 is 5.1%. The schedule of principal payments required on long-term debt for the next five years, exclusive of $14 million of accrued interest related to the RIPSA and NovaQuest debt, and thereafter are as follows:
($ in millions) |
2025 | $ | 6 |
2026 | 25 |
2027 | 62 |
2028 | 3,490 |
2029 | 9 |
Thereafter | 5,443 |
The Senior Credit Agreement contains customary financial covenants, including a total leverage ratio covenant, which measures the ratio of (i) consolidated total debt to (ii) consolidated earnings before interest, taxes, depreciation and amortization, and subject to other adjustments, that must meet certain defined limits which are tested on a quarterly basis. In addition, the Senior Credit Agreement contains covenants that limit, among other things, Organon’s ability to prepay, redeem or repurchase its subordinated and junior lien debt, incur additional debt, make acquisitions, merge with other entities, pay dividends or distributions, redeem, or repurchase equity interests, and create or become subject to liens. As of March 31, 2025, the Company is in compliance with all financial covenants and no default or event of default has occurred.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481544/470-10-50-6 Reference 2: 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