Debt |
6 Months Ended |
|---|---|
Mar. 31, 2025 | |
| Debt Disclosure [Abstract] | |
| Debt | Note 8 — Debt Significant Financing Activities The following significant financing activities occurred during Fiscal 2025. Utilities Mountaineer Senior Notes. In April 2025, Mountaineer entered into a note purchase agreement which provides for the private placement of (1) $50 aggregate principal amount of 6.11% Senior Notes due June 1, 2035, and (2) $20 aggregate principal amount of 6.21% Senior Notes due June 1, 2037. The Senior Notes are expected to be funded on or before May 30, 2025. These Senior Notes, when funded, are unsecured and will rank equally with Mountaineer’s existing outstanding senior debt. Mountaineer expects to use the net proceeds from the issuance of the Senior Notes to reduce short-term borrowings and for general corporate purposes. The note purchase agreement contains customary covenants and default provisions and requires compliance with certain financial covenants including a leverage ratio and interest coverage ratio as defined in the agreement. UGI Utilities Senior Notes. In November 2024, UGI Utilities entered into a note purchase agreement with a consortium of lenders. Pursuant to the note purchase agreement, UGI Utilities issued $50 aggregate principal amount of 5.24% Senior Notes due November 30, 2029, and $125 aggregate principal amount of 5.52% Senior Notes due November 30, 2034. The note purchase agreement contains customary covenants and default provisions and requires compliance with certain financial covenants including a leverage ratio and priority debt ratio as defined in the agreement. These Senior Notes are unsecured and rank equally with UGI Utilities’ existing outstanding senior debt. The net proceeds from these issuances were used to reduce short-term borrowings and for general corporate purposes. Midstream & Marketing Energy Services Receivables Facility. Energy Services has a Receivables Facility with an issuer of receivables-backed commercial paper. In October 2024, the expiration date of the Receivables Facility was extended to October 2025. The Receivables Facility provides Energy Services with the ability to borrow up to $150 of eligible receivables during the period October 18, 2024 to April 30, 2025, and up to $75 of eligible receivables during the period May 1, 2025 to October 17, 2025, with the option to request an increase of $50. The interest rate of the Receivables Facility was replaced with a SOFR based interest rate effective with the extension in October 2024. Energy Services uses the Receivables Facility to fund working capital, margin calls under commodity futures contracts, capital expenditures, dividends and for general corporate purposes. AmeriGas Propane AmeriGas Partners Senior Notes. On February 4, 2025, UGI International borrowed $221 under its revolving credit facility. The proceeds from these borrowings were subsequently used to fund an intercompany loan of $221 to AmeriGas Partners. In March 2025, AmeriGas Partners and AmeriGas Finance Corp, using the cash on hand from borrowings under the intercompany loan, redeemed all of the $218 outstanding aggregate principal balance of the 5.50% Senior Notes due May 2025, plus accrued and unpaid interest. As of March 31, 2025, borrowings outstanding on the intercompany loan were $200. AmeriGas Senior Secured Revolving Credit Facility. In October 2024, AmeriGas OLP amended the AmeriGas Senior Secured Revolving Credit Facility to increase total commitments from $200 to a total of $300. The maximum borrowings permitted to be made at any time under the Credit Agreement is equal to the lesser of (x) the Formula Amount for the borrowing base and (y) the Maximum Revolving Advance Amount, as defined in the agreement. UGI Corporation UGI Corporation 2025 Credit Agreement. In October 2024, UGI entered into a new UGI Corporation 2025 Credit Agreement, consisting of (1) a $475 senior secured revolving credit facility, including a $10 sublimit for letters of credit and (2) a $400 senior secured variable-rate term loan. The revolving credit facility is scheduled to expire in October 2028 and the term loan facility is scheduled to mature in October 2027. Borrowings under the credit agreement are secured by a pledge of UGI’s equity in its material subsidiaries, as defined in the UGI Corporation 2025 Credit Agreement, excluding UGI Utilities and Mountaintop Energy Holdings, LLC, subject to certain additional exceptions and carveouts. Proceeds from the UGI Corporation 2025 Credit Agreement were used to prepay all borrowings under the UGI Corporation Credit Facility Agreement due August 29, 2025 and, concurrent with such repayment, terminated the agreement. Borrowings under the UGI Corporation 2025 Credit Agreement bear interest, subject to our election, at a rate per annum equal to (i) the alternative base rate plus the applicable rate as defined by the agreement or (ii) the adjusted Term SOFR rate plus the applicable rate as defined by the agreement. The Company has entered into an interest rate swap agreement that will generally fix the underlying market-based interest rate on the variable-rate loan through September 2027. Borrowings under the credit agreement can be used for general corporate purposes and ongoing working capital needs of the Company. Because management currently intends to maintain a substantial portion of the amounts outstanding under the $475 revolving credit facility beyond twelve months, and has the ability to do so under the terms of the UGI Corporation 2025 Credit Agreement, borrowings under this revolving credit facility have been classified as “Long-term debt” on the Condensed Consolidated Balance Sheet. UGI Corporation Senior Notes. In June 2024, UGI issued, in an underwritten private placement, an aggregate $700 principal amount of 5.00% UGI Corporation Senior Notes due June 2028. The UGI Corporation Senior Notes are convertible subject to the occurrence of certain events and circumstances. As of March 31, 2025, none of the events permitting the noteholders to convert their notes early occurred. Accordingly, the UGI Corporation Senior Notes are classified as “Long-term debt” on the Condensed Consolidated Balance Sheets. For the three and six months ended March 31, 2025, the Company recognized $10 and $20, respectively, of interest expense, including amortization of debt issuance costs, related to the UGI Corporation Senior Notes at the effective interest rate of 5.62%. We estimate the fair value of long-term debt by using current market rates and by discounting future cash flows using rates available for similar type debt (Level 2). The estimated fair values of the UGI Corporation Senior Notes were $904 and $744 at March 31, 2025 and September 30, 2024, respectively. See the Company’s 2024 Annual Report for additional information on our UGI Corporation Senior Notes.
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