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Debt and Other Financing Activities
 6 Months Ended
Mar. 31, 2026
Debt Disclosure [Abstract]  
Debt and Other Financing Activities

NOTE H – DEBT AND OTHER FINANCING ACTIVITIES

The following table summarizes Ashland’s long-term debt as of:

 

(In millions)

 

March 31, 2026

 

 

September 30, 2025

 

3.375% Senior Notes, due 2031

 

$

450

 

 

$

450

 

2.00% Senior Notes, due 2028 (Euro 500 million principal)

 

 

573

 

 

 

586

 

6.875% Notes, due 2043

 

 

282

 

 

 

282

 

6.50% Junior Subordinated Notes, due 2029

 

 

74

 

 

 

72

 

Other(a)

 

 

(5

)

 

 

(6

)

Long-term debt (less debt issuance costs)(b)

 

$

1,374

 

 

$

1,384

 

 

 

 

 

 

 

 
(a)
Other includes $9 million and $10 million of debt issuance costs as of March 31, 2026 and September 30, 2025, respectively.
(b)
The current portion of the long-term debt was zero for both March 31, 2026 and September 30, 2025.

The scheduled aggregate maturities for long-term debt by year (excluding debt issuance costs) are as follows as of March 31, 2026: zero 2026, $4 million in 2027, $573 million in 2028, $97 million in 2029, zero in 2030 and $450 million in 2031.

Accounts receivable facilities and supply chain finance program

Ashland continues to maintain its U.S. Accounts Receivable Sales Program, which was entered into during fiscal 2021, and its Foreign Accounts Receivable Sales Program, which was entered into during fiscal 2024. Under these programs, Ashland accounts for the accounts receivable transferred to buyers as sales. Ashland recognizes any gains or losses based on the excess of proceeds received net of buyer’s discounts and fees compared to the carrying value of the accounts receivable. Proceeds received, net of buyer’s discounts and fees, are recorded within the operating activities of the Statements of Condensed Consolidated Cash Flows. Losses on sale of accounts receivable, including related transaction expenses are recorded within the net interest and other expense caption of the Statements of Condensed Consolidated Comprehensive Income (Loss). Ashland regularly assesses its servicing obligations and records them as assets or liabilities when appropriate. Ashland also monitors its obligation with regards to the limited guarantee and records the resulting guarantee liability when warranted. When applicable, Ashland discloses the amount of the accounts receivable that serves as over-collateralization as a restricted asset.

U.S. Accounts Receivable Sales Program

Ashland recognized a loss of less than $1 million and $1 million within the Statements of Condensed Consolidated Comprehensive Income (Loss) for the three months ended March 31, 2026 and 2025, respectively, and $1 million and $2 million for the six months ended March 31, 2026 and 2025, respectively, within the net interest and other expense caption associated with sales under the program. Ashland has recorded $60 million in sales at March 31, 2026, against the buyer’s limit, which was $60 million at March 31, 2026 compared to $59 million of sales at September 30, 2025 against the buyer's limit, which was $59 million at September 30, 2025. Ashland transferred $72 million and $75 million in accounts receivable to the special purpose entity as of March 31, 2026 and September 30, 2025, respectively. Ashland recorded liabilities related to its service obligations and limited guarantee as of both March 31, 2026 and September 30, 2025, of less than $1 million.

For the six months ended March 31, 2026 and 2025, the year-to-date gross cash proceeds received for accounts receivable transferred and derecognized were $77 million and $189 million, respectively, of which $76 million and $200 million, respectively, were collected which includes collections from sales in prior years transferred to the buyer. The difference between accounts receivable transferred and derecognized versus collected of $1 million and $11 million for the six months ended March 31, 2026 and 2025, respectively, represents the impact of a net increase and a net reduction in accounts receivable sales volume during each period, respectively.

Foreign Accounts Receivable Sales Program

Ashland recognized a loss of less than $1 million and $1 million within the Statements of Condensed Consolidated Comprehensive Income (Loss) for the three months ended March 31, 2026 and 2025, respectively, and $1 million and $2 million for the six months ended March 31, 2026 and 2025, respectively, within the net interest and other expense caption associated with sales under the program. Ashland has recorded $104 million in sales at March 31, 2026 against the buyer’s limit, which was $104 million at March 31, 2026 compared to $103 million of sales at September 30, 2025 against the buyer's limit, which was $103 million at September 30, 2025. Ashland transferred

$147 million and $142 million, respectively, in accounts receivable to the special purpose entity as of March 31, 2026 and September 30, 2025, respectively. Ashland recorded liabilities related to its service obligations and limited guarantee as of both March 31, 2026 and September 30, 2025 of less than $1 million.

For the six months ended March 31, 2026 and 2025, the year-to-date gross cash proceeds received for accounts receivable transferred and derecognized were $52 million and $242 million, respectively, of which $45 million and $233 million, respectively, were collected. The difference between accounts receivable transferred and derecognized versus collected of $7 million and $9 million for the six months ended March 31, 2026 and 2025, respectively, represents the impact of a net increase in accounts receivable sales volume during each period, respectively.

Supply Chain Finance Program

During April 2024, Ashland authorized a financing program offered through JP Morgan and Taulia Alliance. Under this program, JP Morgan and its affiliates may purchase certain confirmed receivables directly from suppliers pursuant to the terms of a separate arrangement entered into between JPMorgan and Taulia Alliance and such suppliers. There were no changes to Ashland's standard payment terms with its suppliers in connection with this program. Ashland provides no guarantees to JP Morgan and Taulia Alliance under this program. The program was implemented during June 2025 and has been actively offered to suppliers. A rollforward of obligations confirmed and paid is presented below:

 

(In millions)

Three months ended March 31, 2026

 

 

Six months ended March 31, 2026

 

Confirmed obligations outstanding at beginning of period

$

4

 

 

$

—

 

Invoices confirmed during the period

 

5

 

 

 

10

 

Confirmed invoices paid during the period

 

(4

)

 

 

(5

)

Confirmed obligations outstanding at end of period

$

5

 

 

$

5

 

 

 

 

 

 

 

Available borrowing capacity and liquidity

The borrowing capacity remaining under current credit agreement (the “2022 Credit Agreement”) was $596 million, which reflects the full $600 million Revolving Credit Facility less a reduction of $4 million for letters of credit outstanding as of March 31, 2026.

Ashland had no available liquidity under its current U.S. and Foreign Accounts Receivable Sales Programs as of March 31, 2026.

Covenants related to current Ashland debt agreements

Ashland's debt contains usual and customary representations, warranties and affirmative and negative covenants, including financial covenants for leverage and interest coverage ratios, limitations on liens, additional subsidiary indebtedness, restrictions on subsidiary distributions, investments, mergers, sale of assets and restricted payments and other customary limitations. As of March 31, 2026, Ashland is in compliance with all debt agreement covenant restrictions.

The maximum consolidated net leverage ratio permitted under Ashland’s 2022 Credit Agreement is 4.0. At March 31, 2026, Ashland’s calculation of the consolidated net leverage ratio was 2.6.

The minimum required consolidated interest coverage ratio under the 2022 Credit Agreement is 3.0. At March 31, 2026, Ashland’s calculation of the consolidated interest coverage ratio was 6.5.