v3.26.1
Long-Term Debt and Short-Term Borrowings
 3 Months Ended
Mar. 31, 2026
Debt Disclosure [Abstract]  
Long-Term Debt and Short-Term Borrowings Long-Term Debt and Short-Term Borrowings
Long-term debt and short-term borrowings consist of the following:

($ in millions)March 31, 2026December 31, 2025
Senior Credit Agreement
Term Loan B Facility:
SOFR plus 225 bps term loan due 2031
$1,522 $1,543 
EURIBOR plus 275 bps euro-denominated term loan due 2031 (€707 million in 2026 and €717 million in 2025)
814 843 
4.125% secured notes due 2028
2,100 2,100 
2.875% euro-denominated secured notes due 2028 (€1.25 billion)
1,439 1,470 
5.125% notes due 2031
1,582 1,582 
6.750% secured notes due 2034
500 500 
7.875% notes due 2034
500 500 
Revenue Interest Purchase and Sale Agreement (1)
181 179 
Other borrowings8 8 
Other (discounts and debt issuance costs)(77)(81)
Total principal long-term debt and short-term borrowings$8,569 $8,644 
Less: Current portion of long-term debt and short-term borrowings16 16 
Total Long-term debt, net of current portion$8,553 $8,628 
(1) Recognized at the amortized cost basis. The remaining principal is determined as the initial fair value less principal payments. As of March 31, 2026, the remaining principal of the revenue interest purchase and sale agreement (the “RIPSA”) that the Company assumed in connection with its 2024 acquisition of Dermavant is $156 million.

The nature and terms of Organon’s long-term debt are described in detail in Note 12. “Long-Term Debt and Leases” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

On February 6, 2026, the Company made mandatory prepayments from the proceeds of the Jada System divestiture of $20.4 million on the U.S. Dollar Term Loans and €9.6 million on the Euro Term Loan Facility. Additional mandatory prepayments totaling $55 million are required across the Company’s senior secured notes within 450 days of the January 2026 closing of the Jada System divestiture.

For the three months ended March 31, 2026 the Company had no borrowings or repayments on the Company’s Revolving Credit Facility (the “Revolving Credit Facility”). There were no outstanding balances under the Revolving Credit Facility as of March 31, 2026 or December 31, 2025.

Long-term debt was recorded at the carrying amount. The estimated fair value of long-term debt (including current portion) is as follows:
($ in millions)Fair Value Measurement LevelMarch 31, 2026December 31, 2025
Long-term debt
2$7,803 $7,922 
Long-term debt - RIPSA
3136 136 

Level 2 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 liability. Level 3 was estimated using unobservable inputs.

The Company made interest payments related to its debt instruments of $34 million for the three months ended March 31, 2026. The average maturity of the Company’s long-term debt as of March 31, 2026 is approximately 4.3 years and the weighted-average interest rate on total borrowings as of March 31, 2026 is 4.9%.
The schedule of principal payments required on long-term debt and short-term borrowings for the next five years, exclusive of $25 million of accrued interest related to the RIPSA, and thereafter are as follows:
($ in millions)
2026$1 
202761 
20283,500 
20299 
203021 
Thereafter5,029 

The Senior Credit Agreement contains customary financial covenants, including a total leverage ratio covenant, which measures the ratio of (i) consolidated total debt to (ii) consolidated earnings before interest, taxes, depreciation and amortization, and subject to other adjustments, that must meet certain defined limits which are tested on a quarterly basis. In addition, the Senior Credit Agreement contains covenants that limit, among other things, Organon’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 March 31, 2026, the Company is in compliance with all financial covenants, and no default or event of default has occurred.