v3.25.1
Debt
 12 Months Ended
Mar. 31, 2025
Debt Disclosure [Abstract]  
11. DEBT
11. DEBT
Debt consists of the following.
 March 31, 2025March 31, 2024
in millions
Interest Rates(1)
Principal
Unamortized Carrying Value Adjustments(2)
Carrying ValuePrincipal
Unamortized Carrying Value Adjustments(2)
Carrying Value
Short-term borrowings6.54 %$348 $— $348 $759 $— $759 
Floating rate Term Loans, due September 2026— — — 746 (4)742 
Floating rate Term Loans, due March 2028— — — 485 (5)480 
Floating rate Term Loans, due March 2032
6.29 %1,250 (16)1,234 — — — 
3.250% Senior Notes, due November 2026
3.250 %750 (3)747 750 (6)744 
3.375% Senior Notes, due April 2029
3.375 %540 (7)533 540 (7)533 
4.750% Senior Notes, due January 2030
4.750 %1,600 (15)1,585 1,600 (18)1,582 
6.875% Senior Notes, due January 2030
6.875 %750 (11)739 — — — 
3.875% Senior Notes, due August 2031
3.875 %750 (7)743 750 (8)742 
China Bank Loans, due August 20272.75 %41 — 41 53 — 53 
China Loan, due September 20272.80 %13 — 13 — — — 
China Loan, due November 20272.70 %21 — 21 — — — 
China Loan, due December 20272.60 %21 — 21 — — — 
Sierre Loan, due October 20270.71 %113 — 113 — — — 
Finance lease obligations and other debt, due through December 2031(3)
4.61 %15 — 15 23 — 23 
Total debt $6,212 $(59)$6,153 $5,706 $(48)$5,658 
Less: Short-term borrowings(348)— (348)(759)— (759)
Current portion of long-term debt(32)— (32)(33)— (33)
Long-term debt, net of current portion$5,832 $(59)$5,773 $4,914 $(48)$4,866 
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(1)Interest rates are the stated rates of interest on the debt instrument (not the effective interest rate) as of March 31, 2025, and therefore exclude the effects of related interest rate swaps and accretion and amortization of debt issuance costs related to refinancing transactions and additional borrowings. We present stated rates of interest because they reflect the rate at which cash will be paid for future debt service, except for the Sierre loan, for which interest is assessed in arrears.
(2)Amounts include unamortized debt issuance costs, fair value adjustments, and debt discounts.
(3)See Note 9 – Leases for more information.
Principal repayment requirements for our total debt over the next five years and thereafter using exchange rates as of March 31, 2025 for our debt denominated in foreign currencies are as follows (in millions). 
As of March 31, 2025
Amount
Short-term borrowings and current portion of long-term debt due within one year$380 
2 years784 
3 years193 
4 years14 
5 years2,903 
Thereafter1,938 
Total debt$6,212 
Short-Term Borrowings
As of March 31, 2025, our short-term borrowings totaled $348 million, which consisted of $184 million of borrowings on our ABL Revolver, $150 million in short-term Brazil loans, and $14 million in short-term China loans (CNY 100 million).
The weighted average interest rate on the short-term borrowings was 6.54% and 5.78% as of March 31, 2025 and March 31, 2024, respectively.
Senior Secured Credit Facilities
As of March 31, 2025, the senior secured credit facilities consisted of (i) a secured term loan credit facility ("Term Loan Facility") and (ii) a $2.0 billion asset based loan facility ("ABL Revolver"). The senior secured credit facilities contain various affirmative covenants, including covenants with respect to our financial statements, litigation and other reporting requirements, insurance, payment of taxes, employee benefits, and (subject to certain limitations) causing new subsidiaries to pledge collateral and guaranty our obligations. The senior secured credit facilities also include various customary negative covenants and events of default, including limitations on our ability to incur additional indebtedness; sell certain assets; enter into sale and leaseback transactions; make investments, loans, and advances; pay dividends or returns of capital and distributions beyond certain amounts; engage in mergers, amalgamations, or consolidations; engage in certain transactions with affiliates; and prepay certain indebtedness. The senior secured credit facilities include a cross-default provision under which lenders could accelerate repayment of the loans if a payment or non-payment default arises under any other indebtedness with an aggregate principal amount of more than $100 million (or, in the case of the Term Loan Facility, under the ABL Revolver regardless of the amount outstanding). The senior secured credit facilities are guaranteed by certain of the Company's direct and indirect subsidiaries and are secured by a pledge of substantially all of the assets of the Company and the guarantors.
Term Loan Facility
In March 2025, we entered into the Term Loan Facility. The Term Loan Facility provided Novelis with $1.25 billion of commitments, which were borrowed in full (the "2025 Term Loans") and applied to repay in full the indebtedness outstanding under the term loan credit agreement, dated as of January 10, 2017, as amended, (the "Prior Term Loan Facility") satisfying the obligations of the Company and the guarantors under the Prior Term Loan Facility. The Term Loan Facility requires customary mandatory prepayments with excess cash flow, other asset sale proceeds, casualty event proceeds, and proceeds of prohibited indebtedness, all subject to customary reinvestment rights and exceptions. The loans under the Term Loan Facility may be prepaid, in full or in part, at any time at Novelis' election without penalty or premium. The Term Loan Facility allows for additional term loans to be issued in an amount not to exceed (i) the greater of (a) $1.725 billion, and (b) 100% of the Company's consolidated EBITDA for the prior twelve months, plus an amount equal to all voluntary prepayments of the Term Loan Facility and certain other secured indebtedness, plus (ii) an unlimited amount if, after giving effect to such incurrence on a pro forma basis, the senior secured net leverage ratio does not exceed 3.25 to 1.00. The Term Loan Facility also allows for additional term loans to be issued in an amount to refinance loans outstanding under the Term Loan Facility. The lenders under the Term Loan Facility have not committed to provide any such additional term loans.
As of March 31, 2025, we were in compliance with the covenants for our Term Loan Facility.
2025 Term Loans
In March 2025, we borrowed $1.25 billion of term loans. The proceeds of the 2025 Term Loans were used to repay $741 million and $481 million of the previously-issued term loans due September 2026 (the "2023 Term Loans") and March 2028 (the "2021 Term Loans"), respectively, with remaining balance for general corporate purposes and transaction-related expenses. We incurred debt issuance costs of $16 million for the 2025 Term Loans, which will be amortized as an increase to interest expense and amortization of debt issuance costs over the term of the loan. The 2025 Term Loans mature on March 11, 2032, are subject to 0.25% quarterly amortization payments and accrue interest at three-month Term SOFR, as applicable, plus 2.00%, payable at the end of each three-month interest period.
2023 Term Loans
In September 2023, Novelis amended the Prior Term Loan Facility and borrowed $750 million of term loans (the "2023 Term Loans"). The proceeds of the 2023 Term Loan were used to repay the previously-issued term loans due January 2025 (the "2020 Term Loans"). The 2023 Term Loans had a maturity date of September 25, 2026, were subject to 0.25% quarterly amortization payments and accrued interest at SOFR plus 1.65%.
In accordance with ASC 470, Debt, the amendment was accounted for as a partial extinguishment of the 2020 Term Loans, whereby $482 million of the $750 million outstanding at the time of the transaction was deemed an extinguishment and $268 million was deemed a modification of debt. As a result of this transaction, we recorded a loss on extinguishment of debt of $5 million in the second quarter of fiscal 2024.
During fiscal 2025, we made $741 million in principal payments beyond our scheduled quarterly amortization payments to fully repay out 2023 Term Loans, using the proceeds of our 2025 Term Loans, as defined above.
2021 Term Loans
In March 2021, we borrowed $480 million of term loans due March 2028 (the "2021 Term Loans") under the Prior Term Loan Facility, with an additional $20 million being borrowed under the 2021 Term Loans in April 2021. The 2021 Term Loans had a maturity date of March 31, 2028 and were subject to 0.25% quarterly amortization payments. From April 2020 to immediately prior to the interest period commencing June 30, 2023, the 2021 Term Loans accrued interest at LIBOR plus 2.00%. Beginning with the interest period commencing June 30, 2023, the 2021 Term Loans accrued interest at SOFR plus a 0.15% credit spread adjustment plus a spread of 2.00%. The proceeds of the 2021 Term Loans were applied to repay a portion of the 2017 Term Loans.
During fiscal 2025, we made $481 million in principal payments beyond our scheduled quarterly amortization payments to fully repay our 2021 Term Loans, using the proceeds of our 2025 Term Loans, as defined above.
ABL Revolver
As of March 31, 2025, the commitments under our senior secured ABL Revolver are $2.0 billion.
The ABL Revolver facility's limit on committed letters of credit under the facility is $275 million. The commitment under the ABL Revolver is $2.0 billion and the maturity date of the ABL Revolver until August 18, 2027. New borrowings under the ABL Revolver facility incur interest at Term SOFR, EURIBOR, SONIA or SARON, as applicable based on the currency of the loan, plus a spread of 1.10% to 1.60% based on excess availability. The ABL Revolver facility also permits us to elect to borrow USD loans that accrue interest at a base rate (determined based on the greatest of one month Term SOFR plus 1.00%, a prime rate or an adjusted federal funds rate) plus a prime spread of 0.10% to 0.60% based on excess availability.
The ABL Revolver has a provision that allows the existing commitments under the ABL Revolver to be increased by an additional $750 million. The lenders under the ABL Revolver have not committed to provide any such additional commitments. The ABL Revolver has various customary covenants including maintaining a specified minimum fixed charge coverage ratio of 1.25 to 1.0 if an event of default has occurred and is continuing and/or excess availability is less than the greater of (1) $150 million and (2) 10% of the lesser of the total ABL Revolver commitment and the borrowing base. The ABL Revolver matures on August 18, 2027, provided that in the event that the Term Loan Facility or certain other indebtedness is outstanding 60 days prior to its maturity (and not refinanced with a maturity date later than February 15, 2028), then the ABL Revolver will mature 60 days prior to the maturity date for such other indebtedness, as applicable; unless excess availability under the ABL Revolver is at least (1) 17.5% of the lesser of the total ABL Revolver commitment and the borrowing base or (2) 12.5% of the lesser of the total ABL Revolver commitment and the borrowing base, while also maintaining the minimum fixed charge ratio test of at least 1.25 to 1.0.
In April 2024, the Company amended the ABL Revolver facility. The amendment made certain changes to provide the Company with additional flexibility to operate its business, including with relation to fees on obligations denominated in foreign currencies. The ABL Revolver facility was further amended in December 2024. The amendment made certain changes to provide the Company's parent, AV Minerals (Netherlands) N.V., with additional flexibility with respect to investments and collateral requirements.
In March 2025, the Company amended the ABL Revolver facility in connection with the Term Loan Facility entered into in March 2025. The amendment made certain changes to the ABL Revolver that give the Company additional flexibility to operate its business and enter into various transactions and releases the Company’s parent, AV Minerals (Netherlands) N.V. form the restrictions under the ABL Revolver, as similarly contemplated by the Term Loan Facility.
As of March 31, 2025, we were in compliance with the covenants for our ABL Revolver.
As of March 31, 2025, we had $184 million in borrowings under our ABL Revolver. We utilized $58 million of our ABL Revolver for letters of credit. We had availability of $1.6 billion on the ABL Revolver, including $217 million of remaining availability which can be utilized for letters of credit.
Senior Notes
The Senior Notes are guaranteed, jointly and severally, on a senior unsecured basis, by Novelis Inc. and certain of its subsidiaries. The Senior Notes contain customary covenants and events of default that will limit our ability and, in certain instances, the ability of certain of our subsidiaries to incur additional debt and provide additional guarantees; pay dividends or return capital beyond certain amounts and make other restricted payments; create or permit certain liens; make certain asset sales; use the proceeds from the sales of assets and subsidiary stock; create or permit restrictions on the ability of certain of Novelis' subsidiaries to pay dividends or make other distributions to Novelis or certain of Novelis' subsidiaries, as applicable; engage in certain transactions with affiliates; enter into sale and leaseback transactions; designate subsidiaries as unrestricted subsidiaries; and consolidate, merge, or transfer all or substantially all of our assets and the assets of certain of our subsidiaries. During any future period in which either Standard & Poor's Ratings Group, Inc. or Moody's Investors Service, Inc. have assigned an investment grade credit rating to the Senior Notes and no default or event of default under the indenture has occurred and is continuing, certain of the covenants will be suspended. The Senior Notes include customary events of default, including a cross-acceleration event of default. The Senior Notes also contain customary call protection provisions for our bondholders that extend through November 2023 for the 3.250% Senior Notes due November 2026, through April 2024 for the 3.375% Senior Notes due April 2029, through January 2025 for the 4.750% Senior Notes due January 2030, through August 2026 for the 3.875% Senior Notes due August 2031, and through January 2027 for the 6.875% Senior Notes due January 2030.
As of March 31, 2025, we were in compliance with the covenants for our Senior Notes.
2026 Senior Notes
In August 2021, Novelis Corporation, an indirect wholly owned subsidiary of Novelis Inc., issued $750 million in aggregate principal amount of 3.250% Senior Notes due November 2026 (the "2026 Senior Notes"). The 2026 Senior Notes mature on November 15, 2026 and are subject to semi-annual interest payments that will accrue at a rate of 3.250% per year. The net proceeds of the offering, together with cash on hand, were used to (i) fund the redemption of a portion of the 5.875% Senior Notes due September 2026, plus the redemption premium and accrued and unpaid interest thereon and (ii) pay certain fees and expenses in connection with the foregoing and the offering of the notes. We incurred debt issuance costs of $11 million for the 2026 Senior Notes, which are amortized as an increase to interest expense and amortization of debt issuance costs over the term of the note.
2029 Senior Notes
In March 2021, Novelis Sheet Ingot GmbH, an indirect wholly owned subsidiary of Novelis Inc., organized under the laws of Germany, issued €500 million in aggregate principal amount of 3.375% Senior Notes due April 2029 (the "2029 Senior Notes"). The 2029 Senior Notes are subject to semi-annual interest payments and mature on April 15, 2029. The proceeds were used to pay down a portion of the 2017 Term Loans, plus accrued and unpaid interest. In addition, we intend to allocate an amount equal to the net proceeds received from this issuance to finance and/or refinance new and/or existing eligible green projects, which are currently contemplated to consist of renewable energy or pollution prevention and control type projects. We incurred debt issuance costs of $13 million for the 2029 Senior Notes, which are amortized as an increase to interest expense and amortization of debt issuance costs over the term of the note.
4.750% 2030 Senior Notes
In January 2020, Novelis Corporation, an indirect wholly owned subsidiary of Novelis Inc., issued $1.6 billion in aggregate principal amount of 4.750% Senior Notes due January 2030 (the "4.750% 2030 Senior Notes"). The 4.750% 2030 Senior Notes are subject to semi-annual interest payments and mature on January 30, 2030.
6.875% 2030 Senior Notes
In January 2025, Novelis Corporation, an indirect wholly owned subsidiary of Novelis Inc., issued $750 million in aggregate principal amount of 6.875% Senior Notes due January 2030 (the "6.875% 2030 Senior Notes"). The 6.875% 2030 Senior Notes are subject to semi-annual interest payments and mature on January 30, 2030. The net proceeds of the offering were used to repay $738 million of outstanding borrowings under the Company's ABL Revolver facility, with the remaining balance allocated for general corporate purposes and transaction-related expenses. We incurred debt issuance costs of $12 million for the 6.875% 2030 Senior Notes, which are amortized as an increase to interest expense and amortization of debt issuance costs over the term of the note.
2031 Senior Notes
In August 2021, Novelis Corporation, an indirect wholly owned subsidiary of Novelis Inc., issued $750 million in aggregate principal amount of 3.875% Senior Notes due August 2031 (the "2031 Senior Notes"). The 2031 Senior Notes mature on August 15, 2031 and are subject to semi-annual interest payments that will accrue at a rate of 3.875% per year. The net proceeds of the offering, together with cash on hand, were used to (i) fund the redemption a portion of the 5.875% Senior Notes due September 2026, plus the redemption premium and accrued and unpaid interest thereon and (ii) pay certain fees and expenses in connection with the foregoing and the offering of the notes. We incurred debt issuance costs of $11 million for the 2031 Senior Notes, which are amortized as an increase to interest expense and amortization of debt issuance costs over the term of the note.
China Bank Loans
In September 2019, we entered into a credit agreement with the Bank of China to provide up to CNY 500 million in unsecured loans to support certain capital expansion projects in China. As of March 31, 2025, we had $41 million (CNY 300 million) of borrowings on our China bank loans.
Brazil Loans
In December 2021, we borrowed $30 million and $20 million of bank loans in Brazil due June 16, 2023 and December 15, 2023, respectively. These bank loans were subject to 1.80% interest due in full at the respective maturity date.
During the second and third quarters of fiscal 2024, we repaid the $30 million Brazil Loan, due June 2023 and the $20 million Brazil Loan, due December 2023, respectively.
China Loans
In the second quarter of fiscal 2025, we borrowed CNY 100 million of bank loans. The China Loan, due September 2027 matures on September 20, 2027, is subject to monthly interest payments, and accrues interest at China Loan Prime Rate less 0.55%. The loan amount is due in full at the maturity date. As of March 31, 2025, we had $13 million (CNY 100 million) of borrowings on our loan.
In the third quarter of fiscal 2025, we borrowed CNY 150 million of bank loans. The China Loan, due November 2027 matures on November 20, 2027, is subject to monthly interest payments, and accrues interest at China Loan Prime Rate less 0.40%. The loan amount is due in full at the maturity date. As of March 31, 2025, we had $21 million (CNY 150 million) of borrowings on our loan.
Additionally, in the third quarter of fiscal 2025, we borrowed CNY 150 million of bank loans. The China Loan, due December 2027 matures on December 16, 2027, is subject to quarterly interest payments, and accrues interest at China Loan Prime Rate less 0.50%. The loan amount is subject to annual principal payments determined by the debt agreement, with the final payment due at the maturity date. As of March 31, 2025, we had $21 million (CNY 150 million) of borrowings on our loan.
Sierre Loan
In the third quarter of fiscal 2025, we borrowed CHF 100 million from the Banque Cantonale du Valais in order to fund the recovery of our Sierre facility after it flooded in June 2024 (the "Sierre Loan"). The Sierre Loan will mature on October 29, 2027, is subject to quarterly interest payments, and accrues interest at the Swiss Average Rate Overnight plus a spread of 0.50%. The loan amount is due in full at the maturity date. All interest on the Sierre Loan is payable by the Canton of Valais, the local Swiss governmental body where the Sierre facility is located, as part of the Canton’s post-flood recovery efforts in the area. As of March 31, 2025, we had $113 million (CHF 100 million) of borrowings on our loan.
Loss on Extinguishment of Debt, Net
During fiscal 2023 we did not incur any loss on extinguishment of debt, net.
During fiscal 2024, we incurred $5 million in loss on extinguishment of debt, net, primarily related to the partial extinguishment of the 2020 Term Loans.
During fiscal 2025, we incurred $7 million in loss on extinguishment of debt, net, primarily related to the repayment of the 2023 Term Loans and the 2021 Term Loans.