DONALDSON Co INCDCI
DONALDSON Co INC Debt Disclosure
Note 7. Short-Term Borrowings and Long-Term Debt
Short-Term Borrowings
Short-term borrowings were as follows (in millions):
| European Commercial Paper Program | U.S. Credit Facilities | European Operations Credit Facilities | Rest of the World Credit Facilities | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Year Ended July 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Available credit facilities | $ | 114.5 | $ | 108.3 | $ | 100.0 | $ | 100.0 | $ | 50.3 | $ | 48.4 | $ | 52.7 | $ | 46.7 | $ | 317.5 | $ | 303.4 | ||||||||||||||||||||||||||||||||||||||||||
| Reductions to borrowing capacity: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Outstanding borrowings | — | 22.8 | 31.2 | 0.2 | — | — | — | 5.3 | 31.2 | 28.3 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other non-borrowing reductions | — | — | — | — | 30.1 | 38.9 | 28.7 | 25.7 | 58.8 | 64.6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total reductions | — | 22.8 | 31.2 | 0.2 | 30.1 | 38.9 | 28.7 | 31.0 | 90.0 | 92.9 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Remaining borrowing capacity | $ | 114.5 | $ | 85.5 | $ | 68.8 | $ | 99.8 | $ | 20.2 | $ | 9.5 | $ | 24.0 | $ | 15.7 | $ | 227.5 | $ | 210.5 | ||||||||||||||||||||||||||||||||||||||||||
Weighted average interest rate as of July 31, 2025 and 2024 | N/A | 4.34 | % | 5.20 | % | 6.44 | % | N/A | N/A | N/A | 0.56 | % | 5.20 | % | 3.62 | % | ||||||||||||||||||||||||||||||||||||||||||||||
Other non-borrowing reductions include financial instruments such as bank guarantees and foreign currency exchange instruments. Commitment fees for the years ended July 31, 2025 and 2024 were not material.
Long-Term Debt
Long-term debt was as follows:
| Interest Rate | Outstanding Balance (in millions) | |||||||||||||||||||||||||||||||||||||||||||
| Financial Instrument | Fixed or Variable | Amount | Maturity Date | July 31, 2025 | July 31, 2024 | July 31, 2025 | July 31, 2024 | |||||||||||||||||||||||||||||||||||||
Unsecured term loan | Variable | $ | 200.0 | million | June 12, 2028 | 5.57 | % | — | % | 200.0 | — | |||||||||||||||||||||||||||||||||
| Unsecured senior notes | Fixed | $125.0 million | June 17, 2030 | 3.18 | % | 3.18 | % | 125.0 | 125.0 | |||||||||||||||||||||||||||||||||||
Unsecured senior notes | Fixed | $100.0 million | August 5, 2031 | 2.50 | % | 2.50 | % | 100.0 | 100.0 | |||||||||||||||||||||||||||||||||||
| Unsecured revolving credit facility | Variable | $600.0 million | June 12, 2030 | 5.44 | % | 6.44 | % | 60.0 | 110.0 | |||||||||||||||||||||||||||||||||||
| Unsecured term loan | Variable | €80.0 million | March 26, 2029 | 2.83 | % | 4.69 | % | 91.6 | 86.6 | |||||||||||||||||||||||||||||||||||
Unsecured senior notes | Fixed | $50.0 million | November 5, 2028 | 2.12 | % | 2.12 | % | 50.0 | 50.0 | |||||||||||||||||||||||||||||||||||
| Unsecured senior notes | Fixed | $25.0 million | April 16, 2025 | 2.93 | % | 2.93 | % | — | 25.0 | |||||||||||||||||||||||||||||||||||
| Unsecured term loan | Variable | ¥1.0 | billion | July 31, 2028 | 1.28 | % | 0.76 | % | 6.7 | 6.7 | ||||||||||||||||||||||||||||||||||
| Unsecured term loan | Variable | ¥1.0 | billion | July 15, 2026 | 1.20 | % | 0.68 | % | 6.7 | 6.7 | ||||||||||||||||||||||||||||||||||
| Debt issuance costs, net | (2.9) | (1.6) | ||||||||||||||||||||||||||||||||||||||||||
| Subtotal | 637.1 | — | 508.4 | |||||||||||||||||||||||||||||||||||||||||
| Less current maturities | (6.7) | (25.0) | ||||||||||||||||||||||||||||||||||||||||||
| Total long-term debt | $ | 630.4 | $ | 483.4 | ||||||||||||||||||||||||||||||||||||||||
During the fourth quarter of fiscal 2025, the Company entered into an amendment to its $500.0 million revolving credit facility. The amendment provides for the following modifications to the existing agreement: (i) the maturity date of the revolving credit facility was extended from May 21, 2026 to June 12, 2030, (ii) the aggregate revolving credit limit was increased from $500.0 million to $600.0 million, (iii) a new term loan facility was added in the amount of $200.0 million with a maturity date of June 12, 2028, which was fully advanced on the closing date, (iv) the revolving credit facility was repaid in part with the proceeds of the term loan facility, and (v) the incremental credit facility option was increased from $250.0 million to $350.0 million and may be in the form of an increase to the revolving credit facility and/or incremental term loans. The Company’s $600.0 million revolving credit facility is with a group of lenders and allows for borrowings in multiple currencies. The interest rate is calculated using the appropriate benchmark rate plus the applicable rate, which varies depending on the Company’s leverage ratio and the applicable benchmark rate. The borrowing availability can be reduced or terminated early at the option of the Company. The Company can request to increase the revolving credit facility by up to $350.0 million through an accordion feature, subject to terms of the credit facility agreement, including written notification and lender acceptance. Borrowings are automatically rolled over until the credit facility maturity date, unless the agreement is terminated early or the Company is found to be in default. The total facility includes a commitment fee of 0.08% to 0.25%, depending on the Company’s leverage ratio.
Certain debt agreements contain financial covenants related to interest coverage and leverage ratios, as well as other non-financial covenants. As of July 31, 2025, the Company was in compliance with all such covenants.
The Company has long-term borrowing capacity of $532.1 million available for further borrowing under the existing credit facility as of July 31, 2025. The remaining borrowing capacity has been reduced for standby letters of credit as discussed in Note 17.
Future maturities of the Company’s long-term debt as of July 31, 2025 were as follows (in millions):
| 2026 | $ | 6.7 | ||||||
| 2027 | — | |||||||
| 2028 | 206.7 | |||||||
| 2029 | 141.6 | |||||||
| 2030 | 185.0 | |||||||
| Thereafter | 100.0 | |||||||
| Total future maturities payments | 640.0 | |||||||
| Less debt issuance costs, net | (2.9) | |||||||
| Total future maturities payments, net of debt issuance costs | $ | 637.1 | ||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Sep 26, 2025 | Showing above |
| 2024 | Sep 27, 2024 | |
| 2023 | Sep 22, 2023 | |
| 2022 | Sep 23, 2022 | |
| 2019 | Sep 27, 2019 | |
| 2018 | Oct 1, 2018 | |
| 2017 | Sep 22, 2017 | |
| 2016 | Sep 23, 2016 | |
| 2015 | Nov 10, 2015 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.