Long-Term Debt

6 Months Ended

Mar. 31, 2022

Long-Term debt, net of discounts where applicable, is summarized as follows (in millions):


	March 31, 2022		September 30, 2021
3.25 percent convertible notes due 2037 (1)	$	321	$	321

4.50 percent notes due 2028	271		270
6.25 percent notes due 2025	296		296

Term loan due 2024	144		153
Finance lease obligation	12		10
Borrowings and securitization (2)	95		—
Unamortized discount on convertible notes (1)	—		(23)
Subtotal	1,139		1,027
Less: short-term debt	(114)		(19)
Long-term debt	$	1,025	$	1,008

(1) Unamortized debt discount on the 3.25 Percent Convertible Notes was derecognized upon adoption of ASU 2020-06 on October 1, 2021 (see Note 3).

(2) Amount relates to a draw on securitization.

Revolving Credit Facility

The company has a $685 million senior secured revolving credit facility that matures in June 2024. The availability under the senior secured revolving credit facility is subject to a financial covenant based on the ratio of the company’s priority debt (consisting principally of amounts outstanding under the revolving credit facility, the U.S. accounts receivable securitization and factoring programs, and third-party non-working capital foreign debt) to EBITDA. The company is required to maintain a total priority-debt-to-EBITDA ratio, as defined in the credit agreement, of 2.25 to 1.00 or less as of the last day of each fiscal quarter throughout the term of the agreement. Availability under the senior secured revolving credit facility was constrained to

$572 million on the last day of the second quarter of fiscal year 2022 due primarily to a higher priority debt balance within the U.S. accounts receivable securitization and factoring programs. The higher priority debt balance at the end of the second quarter of fiscal year 2022 was driven by an increase in working capital requirements, partially offset by higher earnings. The company has full availability until the next measurement date at the end of the third quarter of fiscal year 2022.

At March 31, 2022 and September 30, 2021, there were no borrowings outstanding under the senior secured revolving credit facility. The senior secured revolving credit facility includes $100 million of availability for the issuance of letters of credit. At March 31, 2022 and September 30, 2021, there were no letters of credit outstanding under the senior secured revolving credit facility.

Other

One of the company's consolidated joint ventures in China participates in a bills of exchange program to settle its obligations with its trade suppliers. These programs are common in China and generally require the participation of local banks. Under these programs, the company's joint venture issues notes payable through the participating banks to its trade suppliers. If the issued notes payable remain unpaid on their respective due dates, this could constitute an event of default under the company’s revolving credit facility if the defaulted amount exceeds $35 million per bank. As of March 31, 2022 and September 30, 2021, the company had $24 million and $25 million, respectively, outstanding under this program at more than one bank.