Otis Worldwide CorpOTIS
Otis Worldwide Corp Debt Disclosure
Borrowings and Lines of Credit
Short-term borrowings consisted of the following as of December 31:
| (dollars in millions) | 2025 | 2024 | ||||||||||||
| Commercial paper | $ | — | $ | — | ||||||||||
| Other borrowings | 215 | 51 | ||||||||||||
| Total short-term borrowings | $ | 215 | $ | 51 | ||||||||||
Commercial Paper and Other Borrowings. As of December 31, 2025, there were no borrowings outstanding under the Company's $1.5 billion commercial paper programs. We use our commercial paper borrowings for general corporate purposes including to finance acquisitions, pay dividends, repurchase shares and for debt refinancing. The need for commercial paper borrowings may arise if the use of domestic cash for general corporate purposes exceeds the sum of domestic cash generation and foreign cash repatriated to the U.S. The main increase in Other borrowings was due to borrowings for the purchase of the outstanding shares of Otis Electric from the non-controlling shareholder. See Note 1 "Business Overview" for additional information on the acquisition of the non-controlling interest.
Long-Term Debt. As of December 31, 2025, we have a credit agreement ("Credit Agreement") with various banks providing for a $1.5 billion unsecured, unsubordinated five-year revolving credit facility, effective August 8, 2025, with an interest rate on US dollar denominated borrowings at Otis' option of the Term Secured Overnight Financing Rate ("SOFR") or a base rate, and an interest rate on Euro denominated borrowings at Otis' option of the EURIBO rate or a daily simple Euro Short Term Rate ("ESTR"), plus, in each case, an applicable margin. The applicable margin initially is 1.000% for Term SOFR rate, EURIBO rate and daily simple ESTR rate borrowings, and 0.000% for base rate borrowings, and can fluctuate based on reference to Otis' public debt ratings, as specified in the Credit Agreement. As of December 31, 2025, there were no borrowings under the revolving credit facility. The undrawn portion of the revolving credit facility serves as a backstop for the issuance of commercial paper. On August 8, 2025, we terminated all commitments outstanding under the previous credit agreement, which was scheduled to expire on March 10, 2028.
On August 16, 2023, we issued $750 million unsecured, unsubordinated five-year notes due August 16, 2028 (the "Notes") with an interest rate of 5.25%. The net proceeds of the Notes were used to fund the repayment of our outstanding commercial paper borrowings and to fund the repayment at maturity of the €500 million 0.000% Euro Notes due November 12, 2023, with the remainder used for other general corporate purposes.
On November 19, 2024, we issued $600 million unsecured, unsubordinated seven-year notes due November 19, 2031 with an interest rate of 5.125% and €850 million Euro denominated ($899 million), unsecured, unsubordinated three-year notes due November 19, 2027 with an interest rate of 2.875%. A portion of the net proceeds of the notes were used to fund the repayment at maturity of the $1.3 billion 2.056% Notes that were due on April 5, 2025. The remainder of the proceeds were used to fund the repayment of the Company's commercial paper borrowings and for other general corporate purposes.
On September 4, 2025, we issued $500 million unsecured, unsubordinated ten-year notes due September 4, 2035 with an interest rate of 5.131%. A portion of the proceeds will be used to fund the repayment at maturity of the Japanese Yen denominated 0.370% Notes due March 18, 2026. The remainder of the proceeds were used to fund the repayment of certain of our commercial paper borrowings.
Our revolving credit agreement and indentures contain affirmative and negative covenants customary for financings of these types that, among other things, limit the Company's and its subsidiaries' ability to incur additional liens, to make certain fundamental changes and to enter into sale and leaseback transactions. In addition, the revolving credit agreement requires that we maintain a maximum consolidated leverage ratio, as defined in the agreement. The revolving credit agreement and indentures also contain events of default customary for financings of these types. The Company is in compliance with all covenants in the revolving credit agreement and the indentures governing all notes as of December 31, 2025.
Long-term debt, including current portion, consisted of the following as of December 31:
| (dollars in millions) | 2025 | 2024 | ||||||||||||
2.056% notes due 2025 | $ | — | $ | 1,300 | ||||||||||
0.370% notes due 2026 (¥21.5 billion principal value) | 137 | 137 | ||||||||||||
0.318% notes due 2026 (€600 million principal value) | 705 | 624 | ||||||||||||
2.293% notes due 2027 | 500 | 500 | ||||||||||||
2.875% notes due 2027 (€850 million principal value) | 999 | 885 | ||||||||||||
5.250% notes due 2028 | 750 | 750 | ||||||||||||
2.565% notes due 2030 | 1,500 | 1,500 | ||||||||||||
5.125% notes due 2031 | 600 | 600 | ||||||||||||
0.934% notes due 2031 (€500 million principal value) | 588 | 520 | ||||||||||||
5.131% notes due 2035 | 500 | — | ||||||||||||
3.112% notes due 2040 | 750 | 750 | ||||||||||||
3.362% notes due 2050 | 750 | 750 | ||||||||||||
| Other (including finance leases) | 6 | 6 | ||||||||||||
| Total principal long-term debt | 7,785 | 8,322 | ||||||||||||
| Other (discounts and debt issuance costs) | (44) | (49) | ||||||||||||
| Total long-term debt | 7,741 | 8,273 | ||||||||||||
| Less: current portion | 841 | 1,300 | ||||||||||||
| Long-term debt, net of current portion | $ | 6,900 | $ | 6,973 | ||||||||||
We may redeem any series of notes at our option pursuant to certain terms.
Debt discounts and debt issuance costs are presented as a reduction of debt in the Consolidated Balance Sheets and are amortized as a component of interest expense over the term of the related debt using the effective interest method. The Consolidated Statements of Operations for 2025, 2024 and 2023 reflects the following:
| (dollars in millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Debt issuance costs amortization | $ | 10 | $ | 8 | $ | 7 | ||||||||||||||
| Total interest expense on debt | 217 | 183 | 155 | |||||||||||||||||
The unamortized debt issuance costs as of December 31, 2025 and 2024 were $41 million and $45 million, respectively.
The average maturity of our long-term debt as of December 31, 2025 is approximately 6.7 years. The average interest expense rate on our borrowings as of December 31, 2025 and 2024 was as follows:
| 2025 | 2024 | |||||||||||||
| Short-term commercial paper | — | % | — | % | ||||||||||
| Total long-term debt | 3.0 | % | 2.7 | % | ||||||||||
The average interest expense rate on our borrowings for 2025, 2024 and 2023 was as follows:
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Short-term commercial paper | 3.8 | % | 5.4 | % | 5.1 | % | ||||||||||||||
| Total long-term debt | 2.8 | % | 2.5 | % | 2.1 | % | ||||||||||||||
The schedule of principal payments required on long-term debt, excluding finance leases, for the next five years and thereafter is:
| (dollars in millions) | Principal Payments | |||||||
| 2026 | $ | 842 | ||||||
| 2027 | 1,499 | |||||||
| 2028 | 750 | |||||||
| 2029 | — | |||||||
| 2030 | 1,500 | |||||||
| Thereafter | 3,188 | |||||||
| Total | $ | 7,779 | ||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 5, 2026 | Showing above |
| 2024 | Feb 4, 2025 | |
| 2023 | Feb 2, 2024 | |
| 2022 | Feb 3, 2023 | |
| 2021 | Feb 4, 2022 | |
| 2020 | Feb 5, 2021 | |
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.