TEREX CORPTEX
TEREX CORP Debt Disclosure
LONG-TERM OBLIGATIONS
Long-term debt is summarized as follows (in millions):
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
5% Senior Notes due May 15, 2029, net of unamortized debt issuance costs of $3 and $4 million at December 31, 2025 and 2024, respectively | $ | 597 | $ | 596 | |||||||
6.25% Senior Notes due October 15, 2032, net of unamortized debt issuance costs of $15 million and $17 million at December 31, 2025 and 2024, respectively | 735 | 733 | |||||||||
Credit Agreement – term debt due October 8, 2031 (“New Term Facility”, as defined below), net of unamortized debt issuance costs of $17 million and $20 million; and unamortized original issue discount of $5 million and $6 million at December 31, 2025 and 2024, respectively | 1,218 | 1,224 | |||||||||
| Secured borrowings | 21 | 18 | |||||||||
| 11 | 12 | ||||||||||
| Other | 2 | 1 | |||||||||
| Total debt | 2,584 | 2,584 | |||||||||
| Less: Current portion of long-term debt | (6) | (4) | |||||||||
| Long-term debt, less current portion | $ | 2,578 | $ | 2,580 | |||||||
Credit Agreement
On January 31, 2017, the Company entered into a credit agreement with the lenders and issuing banks party thereto and Credit Suisse AG, Cayman Islands Branch (“CSAG”), as administrative agent and collateral agent, to provide the Company with a multi-currency revolving line of credit and senior secured term loans. On April 1, 2021, the Company entered into an amendment and restatement of the credit agreement (as amended and restated, the “Credit Agreement”).
On January 31, 2017, the Company entered into a Guarantee and Collateral Agreement with CSAG, as collateral agent for the lenders, granting security and guarantees to the lenders for amounts borrowed under the Credit Agreement. Pursuant to the Guarantee and Collateral Agreement, Terex is required to (a) pledge as collateral the capital stock of the Company’s material domestic subsidiaries and 65% of the capital stock of certain of the Company’s material foreign subsidiaries and (b) provide a first priority security interest in substantially all of the Company’s domestic assets. On December 29, 2022, the Company entered into an amendment to the Guarantee and Collateral Agreement which included the following principal changes to the original agreement: (i) enabling a subsidiary to enter into hedging derivatives with external counterparties and (ii) inclusion of Terex subsidiary entities’ cash management services provided by lending banks to be secured under the Guarantee and Collateral Agreement.
On May 8, 2023, the Company and certain of its subsidiaries entered into Amendment No. 1 (“Amendment No. 1”) to the Credit Agreement, with the lenders and issuing banks party thereto and CSAG. The principal changes contained in Amendment No. 1 relate to the replacement of the adjusted LIBOR with term Secured Overnight Financing Rate (“SOFR”). The Credit Agreement contemplated uncommitted incremental amounts in excess of $300 million that may be extended by the lenders, at their option, as long as the Company satisfies the maximum permitted level of senior secured leverage as defined in the Credit Agreement.
On October 8, 2024, the Company entered into an Incremental Assumption Agreement, Borrowing Subsidiary Agreement and Amendment No. 2 (the “Amendment No. 2”) to the Credit Agreement dated as of April 1, 2021 (the “Amended Credit Agreement No. 2”), with certain of the Company’s subsidiaries, the lenders and issuing banks party thereto and UBS AG as successor administrative agent and successor collateral agent.
The Amendment No. 2 (i) increased the size of the Company’s existing revolving credit facilities (the “Revolver”) to $800 million and extended the maturity of the Company’s existing revolving credit facilities to expire on October 8, 2029 (the “New Revolving Credit Facilities”) and (ii) provided for a new seven-year term loan facility in an aggregate principal amount of $1,250 million with a maturity date of October 8, 2031 (the “New Term Facility”, together with the New Revolving Credit Facilities, the “New Credit Facilities”). In addition, the Amended Credit Agreement No. 2 increased the size of the letter of credit facility. The Amended Credit Agreement No. 2 provides for the issuance of letters of credit (the “L/C Facility”) of up to $500 million (the utilization of which would decrease availability under the New Revolving Credit Facilities) and permits the Company to have additional secured facilities for the issuance of letters of credit outside of the Amended Credit Agreement No. 2 (the “Additional L/C Facility”) of up to $400 million (the utilization of which would not decrease availability under the New Revolving Credit Facilities). The aggregate amount of letters of credit which the Company may issue under the L/C Facility and the Additional L/C Facility may not at any time exceed $500 million, of which up to $400 million may be issued under the Additional L/C Facility. Borrowings under the New Term Facility initially bear interest at a per annum rate equal to Term SOFR, plus 2.00% subject to a stepdown of 0.25% based on achieving and maintaining a first lien net leverage ratio equal to or less than 0.50x.
On August 12, 2025, the Company and certain of its subsidiaries entered into a Refinancing Facility Agreement and Amendment No. 3 (the “Amendment No. 3”) to the Credit Agreement dated as of April 1, 2021 (the “Amended Credit Agreement”), with certain of its subsidiaries, the lenders and issuing banks party thereto and UBS AG, Stamford Branch, as administrative agent and collateral agent. The principal changes contained in the Amendment No. 3 are (i) the Company’s U.S. Dollar denominated term loans will now bear interest at a rate of SOFR plus 1.75%. Previously, the U.S. Dollar denominated term loans outstanding were priced at SOFR plus 2.00%, (ii) the spread on the revolving credit facilities was reduced by 12.5 to 25 basis points and (iii) Terex International Financial Services Company Unlimited Company was removed as a borrower.
The Amended Credit Agreement contains customary representations and warranties, negative and affirmative covenants and default provisions. The covenants limit, in certain circumstances, the Company’s ability to take a variety of actions, including, but not limited to: incurring or guaranteeing additional indebtedness or issuing preferred equity; creating or maintaining liens; making investments; paying dividends or making other restricted payments; consolidating or merging or transferring all or substantially all of the Company’s assets and the assets of the Company’s subsidiaries; transferring or selling assets, including stock of the Company’s subsidiaries; and redeeming debt. In particular, the New Revolving Credit Facilities require the Company to maintain a first lien net leverage ratio of not more than 3.00x, which will be tested only if more than 30% of the total revolving credit commitments extended under the New Revolving Credit Facilities are utilized as of the last day of any fiscal quarter, subject to certain exclusions. The New Term Facility does not have the benefit of, or have any rights with respect to, the financial maintenance covenant. The Amended Credit Agreement provides for customary events of default which include, among other things, (subject in certain cases to customary grace and cure periods) defaults based on (i) the failure to make payments under the Indenture when due, (ii) breach of covenants, (iii) the occurrence of a default under other material indebtedness, (iv) a change of control, (v) bankruptcy events and (vi) material judgments. The Company was in compliance with all covenants contained in the Amended Credit Agreement as of December 31, 2025.
The Company had no Revolver amounts outstanding at December 31, 2025 and 2024.
The Company obtains letters of credit that generally serve as collateral for certain liabilities included in the Consolidated Balance Sheet and guaranteeing the Company’s performance under contracts. Letters of credit can be issued under two facilities provided in the Amended Credit Agreement and via bilateral arrangements outside the Amended Credit Agreement.
The Company also has bilateral arrangements to issue letters of credit with various other financial institutions (the “Bilateral Arrangements”). The Bilateral Arrangements are not secured under the Amended Credit Agreement and do not decrease availability under the Revolver.
Letters of credit outstanding (in millions):
| December 31, 2025 | December 31, 2024 | ||||||||||
$500 Million Facility | $ | — | $ | — | |||||||
$400 Million Facility | 45 | 47 | |||||||||
| Bilateral Arrangements | 40 | 48 | |||||||||
| Total | $ | 85 | $ | 95 | |||||||
5% Senior Notes
In April 2021, the Company sold and issued $600 million aggregate principal amount of Senior Notes Due 2029 (“5% Notes”) at par in a private offering. The proceeds from the 5% Notes, together with cash on hand, was used: (i) to fund redemption and discharge of 5-5/8% Senior Notes and (ii) to pay related premiums, fees, discounts and expenses. The 5% Notes are jointly and severally guaranteed by certain of the Company’s domestic subsidiaries. The proceeds from the offering are presented in Long-term debt in the Consolidated Balance Sheet as of December 31, 2025 and 2024. The Company may redeem the 5% Notes in whole or in part, on or after May 15, 2024, at the redemption prices set forth in an indenture dated as of April 1, 2021.
6.25% Senior Notes
On October 8, 2024, the Company sold and issued $750 million aggregate principal amount of Senior Notes Due 2032 (“6.25% Notes”) at par in a private offering. The proceeds from the 6.25% Notes, together with new term loan borrowings under the New Term Facility and cash on hand, were used to consummate the Company’s acquisition of ESG, and to pay the related fees, costs, and expenses. The 6.25% Notes are jointly and severally guaranteed by certain of the Company’s domestic subsidiaries. The proceeds from the offering are presented in Long-term debt in the Consolidated Balance Sheet as of December 31, 2025.
The Company may redeem the 6.25% Notes in whole or in part, on or after October 15, 2027, at the redemption prices set forth in an indenture dated as of October 8, 2024 (the “Indenture”). Prior to October 15, 2027, the Company may redeem the 6.25% Notes, in whole or in part, at a price equal to 100% of the principal amount thereof plus a “make-whole” premium set forth in the Indenture. In addition, prior to October 15, 2027, the Company may redeem up to 40% of the 6.25% Notes with an amount equal to the proceeds of certain equity offerings.
Secured Borrowings
In October 2023, the Company entered into a Framework Agreement to transfer value added tax (“VAT”) receivables to a financial institution in exchange for cash in advance. This arrangement was accounted for as a secured borrowing with a pledge
of collateral for the cash proceeds received as the transfer does not meet the criteria for sale accounting. As a result, the VAT receivables pledged as collateral remain in receivables and a liability of $21 million and $18 million is presented in Long-term debt in the Consolidated Balance Sheet as of December 31, 2025 and 2024, respectively. The long term debt classification is based on estimated timing of VAT refund from the Italian government which is expected to be greater than 12 months. The cash proceeds were included in other financing activities within the Consolidated Statement of Cash Flows for the year ended December 31, 2023.
Schedule of Debt Maturities
Scheduled annual maturities of the principal portion of long-term debt outstanding at December 31, 2025 in the successive five-year period and thereafter are summarized below. Amounts shown are exclusive of minimum lease payments for capital lease obligations and secured borrowings (in millions):
| 2026 | $ | 2 | |||
| 2027 | — | ||||
| 2028 | — | ||||
| 2029 | 600 | ||||
| 2030 | — | ||||
| Thereafter | 1,990 | ||||
| Total Debt | 2,592 | ||||
Less: Unamortized original issue discount | (5) | ||||
| Less: Unamortized debt issuance costs | (35) | ||||
| Net debt | $ | 2,552 | |||
Fair Value of Debt
The Company estimates the fair value of its debt set forth below as of December 31, 2025 and 2024, as follows (in millions, except for quotes):
| 2025 | Book Value | Quote | Fair Value | ||||||||||||||
| 5% Notes | $ | 600 | 0.98875 | $ | 593 | ||||||||||||
6.25% Notes | 750 | 1.02250 | 767 | ||||||||||||||
New Term Facility (net of discount) | 1,236 | 1.00375 | 1,241 | ||||||||||||||
| 2024 | Book Value | Quote | Fair Value | ||||||||||||||
| 5% Notes | $ | 600 | 0.95000 | $ | 570 | ||||||||||||
6.25% Notes | 750 | 0.98000 | 735 | ||||||||||||||
New Term Facility (net of discount) | 1,244 | 1.00250 | 1,247 | ||||||||||||||
The fair value of debt reported in the table above is based on adjusted price quotations on the debt instruments in an inactive market. The Company believes that the carrying value of its other borrowings, including amounts outstanding, if any, for the revolving credit line under the Credit Agreement, approximate fair market value based on maturities for debt of similar terms. Fair values of debt reported in the table above are categorized under Level 2 of the ASC 820 hierarchy. See Note A – “Basis of Presentation” for an explanation of ASC 820 hierarchy.
The Company paid $156 million, $53 million and $39 million of interest in 2025, 2024 and 2023, respectively.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 13, 2026 | Showing above |
| 2017 | Feb 16, 2018 | |
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.