v3.25.4
Debt
 9 Months Ended
Dec. 31, 2025
Debt Disclosure [Abstract]  
6. DEBT
6. DEBT
Debt consists of the following:
December 31, 2025March 31, 2025
in millions
Interest Rates(1)
Principal
Unamortized Carrying 
Value Adjustments(2)
Carrying ValuePrincipal
Unamortized Carrying
Value Adjustments(2)
Carrying Value
Short-term borrowings4.73 %$592 $— $592 $348 $— $348 
Floating rate Term Loans, due March 20325.42 %1,241 (15)1,226 1,250 (16)1,234 
3.25% Senior Notes, due November 2026
3.25 %13 — 13 750 (3)747 
3.375% Senior Notes, due April 2029
3.375 %587 (5)582 540 (7)533 
4.75% Senior Notes, due January 2030
4.75 %1,600 (13)1,587 1,600 (15)1,585 
6.875% Senior Notes, due January 2030
6.875 %750 (10)740 750 (11)739 
3.875% Senior Notes, due August 2031
3.875 %750 (6)744 750 (7)743 
6.375% Senior Notes, due August 2033
6.375 %750 (11)739 — — — 
China Bank Loans, due August 20272.65 %37 — 37 41 — 41 
China Loan, due September 20272.45 %14 — 14 13 — 13 
China Loan, due November 20272.60 %21 — 21 21 — 21 
China Loan, due December 20272.50 %21 — 21 21 — 21 
Sierre Loan, due October 20270.42 %126 — 126 113 — 113 
Series 2025A Bonds, due June 2032(3)
5.00 %400 (6)394 — — — 
Series 2025B Bonds, due June 2032(4)
4.625 %100 (2)98 — — — 
Finance lease obligations and other debt, due through April 20404.87 %27 — 27 15 — 15 
Total debt$7,029 $(68)$6,961 $6,212 $(59)$6,153 
Less: Short-term borrowings
(592)— (592)(348)— (348)
Less: Current portion of long-term debt
(52)— (52)(32)— (32)
Long-term debt, net of current portion$6,385 $(68)$6,317 $5,832 $(59)$5,773 
____________________
(1)Interest rates are the stated rates of interest on the debt instrument (not the effective interest rate) as of December 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)The Series 2025A Bonds, as defined below, accrue interest at a fixed annual rate of 5%, ending with a mandatory tender for purchase on June 1, 2032. The Series 2025A Bonds will mature on June 1, 2055.
(4)The Series 2025B Bonds, as defined below, accrue interest at a fixed annual rate of 4.625%, ending with a mandatory tender for purchase on June 1, 2032. The Series 2025B Bonds will mature on June 1, 2055.
Principal repayment requirements for our total debt over the next five years and thereafter using exchange rates as of December 31, 2025, for our debt denominated in foreign currencies are as follows (in millions):
As of December 31, 2025
Amount
Short-term borrowings and current portion of long-term debt due within one year$644 
2 years94 
3 years143 
4 years602 
5 years2,364 
Thereafter3,182 
Total$7,029 
Short-Term Borrowings
As of December 31, 2025, our short-term borrowings totaled $592 million, which consisted of $289 million of borrowings on our ABL Revolver, $280 million in short-term Brazil loans, $13 million in short-term China loans (CNY 92 million), and $10 million in other short-term borrowings.
The weighted average interest rate on the short-term borrowings was 4.73% and 6.54% as of December 31, 2025, and March 31, 2025, respectively.
Term Loan Facility
In March 2025, we entered into a secured term loan credit facility (the "Term Loan Facility"). The Term Loan Facility provided Novelis with $1.25 billion of proceeds (the "2025 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 and March 2028, 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.
On September 15, 2025, we amended the Term Loan Facility to, among other things, reduce the interest rate from three-month Term SOFR, plus 2.00%, to three-month Term SOFR, plus 1.75%, with interest continuing to be payable at the end of each three-month interest period. In accordance with ASC 470, Debt, the amendment was accounted for as a partial extinguishment of the Term Loan Facility, whereby $65 million was deemed an extinguishment and $1.18 billion was deemed a modification of debt. As a result of this transaction, we recorded a loss on extinguishment of debt of $2 million in the second quarter of fiscal 2026.
As of December 31, 2025, we were in compliance with the covenants of our Term Loan Facility.
ABL Revolver
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. from the restrictions under the ABL Revolver, as similarly contemplated by the Term Loan Facility.
On January 30, 2026, the Company issued a request to its lenders to increase the maximum revolving commitments under the ABL Revolver facility from $2.0 billion to $2.5 billion. The increase will require consent from the lenders under the ABL Revolver facility, which is expected to become effective by the end of February 2026. The Company's borrowing capacity under the ABL Revolving facility following the amendment will be the lower of the commitments or the borrowing base.
As of December 31, 2025, we were in compliance with the covenants for our ABL Revolver.
As of December 31, 2025, we had $289 million in borrowings under the ABL Revolver. We utilized $131 million of the ABL Revolver for letters of credit. We had availability of $1,580 million on the ABL Revolver, including $144 million of remaining availability that can be utilized for letters of credit.
Citi Facility
On August 14, 2025, the Company entered into an Uncommitted Trade Loan Facility Agreement (the "Citi Facility") with Citibank providing for an uncommitted revolving facility for loans and advances of up to an aggregate amount of $200 million. The initial maximum term of each individual loan or advance is 30 days and the Company intends to repay any borrowings prior the end of each month. Borrowings under the Citi Facility bear interest at Term SOFR plus a margin of 1.00%. In January 2026, the Company entered into an amendment to the Citi Facility that resulted in an increase in the maximum aggregate amount of loans and advances from $200 million to $300 million, providing the Company with additional borrowing capacity and flexibility to support its ongoing working capital needs.
As of December 31, 2025, we had no outstanding borrowings under the Citi Facility.
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 3.25% Senior Notes due November 2026 (the "2026 Senior Notes"), through April 2024 for the 3.375% Senior Notes due April 2029, through January 2025 for the 4.75% Senior Notes due January 2030, through August 2026 for the 3.875% Senior Notes due August 2031, through January 2027 for the 6.875% Senior Notes due January 2030, and through August 2028 for the 6.375% Senior Notes due August 2033 (the "2033 Senior Notes").
As of December 31, 2025, we were in compliance with the covenants of our Senior Notes.
2033 Senior Notes and Cash Tender Offer for the 2026 Senior Notes
On August 18, 2025, Novelis Corporation, a wholly owned subsidiary of Novelis Inc., issued $750 million in aggregate principal amount of the 2033 Senior Notes. The 2033 Senior Notes will mature on August 15, 2033 and are subject to semi-annual interest payments that will accrue at a rate of 6.375% per year. Concurrently with the offering, Novelis conducted a cash tender offer for any and all of the outstanding 2026 Senior Notes (the "Tender Offer"). The net proceeds of the offering were used to (i) purchase $737 million of the $750 million outstanding aggregate principal amount of the 2026 Senior Notes that were validly tendered and not withdrawn pursuant to the Tender Offer and (ii) pay fees and expenses in connection with the offering and the Tender Offer. We incurred original issue discount costs of $9 million and debt issuance costs of $3 million related to the 2033 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 December 31, 2025, and March 31, 2025, we had $37 million (CNY 260 million) and $41 million (CNY 300 million), respectively, of borrowings on our China bank loans.
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 December 31, 2025, and March 31, 2025, we had $14 million (CNY 100 million) and $13 million (CNY 100 million), respectively, 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 December 31, 2025, and March 31, 2025, we had $21 million (CNY 149 million) and $21 million (CNY 150 million), respectively, 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 December 31, 2025, and March 31, 2025, we had $21 million (CNY 149 million) and $21 million (CNY 150 million), respectively, 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 December 31, 2025, and March 31, 2025, we had $126 million (CHF 100 million) and $113 million (CHF 100 million), respectively, of borrowings on our loan.
Series 2025A Bonds
In June 2025, Novelis Corporation announced the issuance of $400 million in original aggregate principal amount of tax-exempt bonds (the "Series 2025A Bonds") by the Industrial Development Authority of Baldwin County (the "Baldwin IDA"). The Series 2025A Bonds were issued at par. Novelis Corporation received all net proceeds related to the issuance during the first quarter of fiscal 2026. The proceeds from the Series 2025A Bonds were loaned to Novelis Corporation pursuant to a loan agreement (the "Series 2025A Loan Agreement") with the Baldwin IDA, and will be used to finance a portion of the costs of the construction of the Company's new greenfield rolling and recycling plant located in Bay Minette, Alabama (the "Bay Minette Project"). In connection with this transaction, we incurred debt issuance costs of $6 million, which are amortized as an increase to interest expense and amortization of debt issuance costs over the term of the loan. The Series 2025A Bonds are guaranteed, jointly and severally, on a senior unsecured basis, by Novelis Inc. and certain of its subsidiaries.
The Series 2025A Bonds bear interest at 5.00% per annum, ending with a mandatory tender for purchase on June 1, 2032 (the "Mandatory Tender Date"). After the end of the initial term interest rate period on the Mandatory Tender Date, the Series 2025A Bonds may be converted to a variable (daily or weekly) interest rate period or may remain in a term interest rate period of the same or different duration. If the rate is converted to a variable rate, the interest rate will be reset at the end of each interest rate period. The Series 2025A Bonds will mature on June 1, 2055. The Company will make semiannual interest payments on the outstanding principal on January 15 and July 15 of each year, with the first such interest payment due on January 15, 2026. The Series 2025A Loan Agreement contains standard representations, covenants and events of default for transactions of this type.
As of December 31, 2025, we were in compliance with the covenants under the Series 2025A Loan Agreement.
Series 2025B Bonds
In September 2025, Novelis Corporation announced the issuance of $100 million in original aggregate principal amount of tax-exempt bonds (the "Series 2025B Bonds") by the Baldwin IDA. The Series 2025B Bonds were issued at par. Novelis Corporation received all net proceeds related to the issuance during the second quarter of fiscal 2026. The proceeds from the Series 2025B Bonds were loaned to Novelis Corporation pursuant to a loan agreement (the "Series 2025B Loan Agreement") with the Baldwin IDA, and will be used to finance a portion of the costs of the Bay Minette Project. In connection with this transaction, we incurred debt issuance costs of $2 million, which are amortized as an increase to interest expense and amortization of debt issuance costs over the term of the loan. The Series 2025B Bonds are guaranteed, jointly and severally, on a senior unsecured basis, by Novelis Inc. and certain of its subsidiaries.
The Series 2025B Bonds bear interest at 4.625% per annum, ending with a mandatory tender for purchase on the Mandatory Tender Date (as defined above). After the end of the initial term interest rate period on the Mandatory Tender Date, the Series 2025B Bonds may be converted to a variable (daily or weekly) interest rate period or may remain in a term interest rate period of the same or different duration. If the rate is converted to a variable rate, the interest rate will be reset at the end of each interest rate period. The Series 2025B Bonds will mature on June 1, 2055. The Company will make semiannual interest payments on the outstanding principal on January 15 and July 15 of each year, with the first such interest payment due on January 15, 2026. The Series 2025B Loan Agreement contains standard representations, covenants and events of default for transactions of this type.
As of December 31, 2025, we were in compliance with the covenants under the Series 2025B Loan Agreement.