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Long-Term Debt | 9 Months Ended
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Jun. 30, 2025
Debt Disclosure [Abstract] |
Long-Term Debt | Note 12 — Long-Term Debt Credit Agreement On March 31, 2022, Embecta entered into a credit agreement (the “Credit Agreement”), providing for: •a Term Loan B Facility (the "Term Loan") in the amount of $950.0 million, with a seven-year term that matures in March 2029. The interest rate is 300 basis points over the secured overnight financing rate (“SOFR”), with a 0.50% SOFR floor. The Term Loan was issued at a discount of 0.50%. Principal and interest payments on the Term Loan commenced on June 30, 2022. Such quarterly principal payments are calculated as 0.25% of the initial principal amount, with the remaining balance payable upon maturity; and •a Revolving Credit Facility (the "Revolving Credit Facility") in an aggregate principal amount of up to $500.0 million, with a five-year term that matures in March 2027. Borrowings under the Revolving Credit Facility bear interest, at Embecta’s option, at an annual rate equal to (a) in the case of loans denominated in United States dollars (i) the SOFR or (ii) the alternate base rate or (b) in the case of loans denominated in Euros, the EURIBOR rate, in each case plus an applicable margin specified in the credit agreement. A commitment fee applies to the unused portion of the Revolving Credit Facility, equal to 0.25% per annum. As of June 30, 2025, no amount has been drawn on the Revolving Credit Facility. The Credit Agreement and the indentures for Embecta's outstanding 5.00% senior secured notes due February 2030 (the "5.00% Notes") and 6.75% senior secured notes due February 2030 (the "6.75% Notes") contain customary financial covenants, including a total net leverage ratio covenant, which measures the ratio of (i) consolidated total net debt to (ii) consolidated earnings before interest, taxes, depreciation and amortization, and subject to other adjustments, must meet certain defined limits which are tested on a quarterly basis in accordance with the terms of the Credit Agreement and the 5.00% Notes and 6.75% Notes. In addition, the Credit Agreement contains covenants that will limit, among other things, Embecta’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 June 30, 2025, we were in compliance with all of such covenants. The credit agreement and the senior secured notes are secured by substantially all assets of Embecta and each subsidiary guarantor, subject to certain exceptions. The following is a summary of Embecta's total debt outstanding as of June 30, 2025:
Term Loan due March 2029 | $ | 789.1
5.00% Notes due February 2030 | 500.0
6.75% Notes due February 2030 | 200.0
Total principal debt issued | $ | 1,489.1
Less: current debt obligations | (9.5)
Less: debt issuance costs and discounts | (20.8)
Long-term debt | $ | 1,458.8
The debt issuance costs on the Term Loan, 5.00% Notes, 6.75% Notes and the discount on the Term Loan are reported in the Condensed Consolidated Balance Sheets as a reduction of debt and are amortized as a component of Interest expense, net over the term of the related debt using the effective interest method. During the nine months ended June 30, 2025, the Company recorded approximately $6.5 million of amortization on deferred debt issuance costs and discounts. During the nine months ended June 30, 2025, the Company made interest payments of $68.5 million on debt outstanding. The weighted-average interest rate on total borrowings as of June 30, 2025 is 6.5%. During the nine months ended June 30, 2025, the Company paid an aggregate principal amount of approximately $112.2 million on the Term Loan, of which $105.0 million was discretionary. Debt extinguishment charges as a result of these discretionary prepayments were not material to the Company's Condensed Consolidated Statements of Income. The schedule of principal payments required on long-term debt for the next five fiscal years and thereafter is as follows:
2025 | $ | 2.4 |
2026 | 9.5 |
2027 | 9.5 |
2028 | 9.5 |
2029 | 758.2 |
Thereafter | 700.0 |
The estimated fair value of long-term debt (including current portion) at June 30, 2025 was $1,430.8 million compared with a carrying value (which includes a reduction for unamortized debt issuance costs and discounts) of $1,468.3 million. Fair value 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 asset or liability and would be considered Level 2 in the fair value hierarchy.

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