VALERO ENERGY CORP/TXVLO

VALERO ENERGY CORP/TX Debt Disclosure

10-KFiled Feb 25, 20267 min read
9.    DEBT AND FINANCE LEASE OBLIGATIONS

Debt, at stated values, and finance lease obligations consisted of the following (in millions):
Final
Maturity		December 31,
20252024
Credit facilities:
Valero Revolver
2030$— $— 
Accounts Receivable Sales Facility2026— — 
DGD Revolver2026— — 
DGD Loan Agreement2026— — 
IEnova Revolver
202823 58 
Public debt:
Valero Senior Notes
2.850%
2025— 251 
3.65%
2025— 189 
3.400%
2026426 426 
2.150%
2027564 564 
4.350%
2028591 591 
4.000%
2029439 439 
5.150%
2030650 — 
8.75%
2030200 200 
2.800%
2031462 462 
7.5%
2032729 729 
6.625%
20371,380 1,380 
6.75%
203724 24 
10.500%
2039113 113 
4.90%
2045621 621 
3.650%
2051829 829 
4.000%
2052508 508 
7.45%
209770 70 
Valero Energy Partners LP (VLP) Senior Notes
4.375%
2026146 146 
4.500%
2028456 456 
Debenture, 7.65%
2026100 100 
Net unamortized debt issuance costs and other(70)(71)
Total debt8,261 8,085 
Finance lease obligations (see Note 5)
2,358 2,378 
Total debt and finance lease obligations10,619 10,463 
Less: Current portion949 743 
Debt and finance lease obligations, less current portion$9,670 $9,720 
Credit Facilities
Valero Revolver
In October 2025, we amended our revolving credit facility (the Valero Revolver), which has a borrowing capacity of $4 billion, to extend the maturity date from November 2027 to October 2030 and to modify the reference interest rate from the Adjusted Term SOFR, a secured overnight financing rate (SOFR), to the Term SOFR. We have the option to increase the aggregate commitments under the Valero Revolver to $5.5 billion, subject to certain conditions. The Valero Revolver also provides for the issuance of letters of credit of up to $2.4 billion.

Effective October 2025, outstanding borrowings under the Valero Revolver bear interest, at our option, at either (i) the Term SOFR or (ii) the Alternate Base Rate (each of these rates is defined in the Valero Revolver), plus the applicable margins. The Valero Revolver also requires payments for customary fees, including facility fees, letter of credit participation fees, and administrative agent fees. The interest rate and facility fees under the Valero Revolver are subject to adjustment based upon the credit ratings assigned to our senior unsecured debt.

Accounts Receivable Sales Facility
We have an accounts receivable sales facility with a group of third-party entities and financial institutions to sell up to $1.3 billion of eligible trade receivables on a revolving basis. In July 2025, we extended the maturity date of this facility to July 2026. Under this program, one of our marketing subsidiaries (Valero Marketing) sells eligible receivables, without recourse, to another of our subsidiaries (Valero Capital), whereupon the receivables are no longer owned by Valero Marketing. Valero Capital, in turn, sells an undivided percentage ownership interest in the eligible receivables, without recourse, to the third-party entities and financial institutions. To the extent that Valero Capital retains an ownership interest in the receivables it has purchased from Valero Marketing, such interest is included in our financial statements solely as a result of the consolidation of the financial statements of Valero Capital with those of Valero Energy Corporation; the receivables are not available to satisfy the claims of the creditors of Valero Marketing or Valero Energy Corporation.

As of December 31, 2025 and 2024, $2.7 billion and $2.5 billion, respectively, of our accounts receivable composed the designated pool of accounts receivable included in the program. All amounts outstanding under the accounts receivable sales facility are reflected as debt in our balance sheets and proceeds and repayments are reflected as cash flows from financing activities. Outstanding borrowings under the facility bear interest, at either (i) an adjusted daily simple SOFR or (ii) an alternate base rate as allowed under the terms of this facility, plus applicable margins. The interest rates under the program are subject to adjustment based upon the credit ratings assigned to our senior unsecured debt. The program also requires payments for customary fees, including facility fees.

DGD Revolver
DGD, as described in Note 12, has a $400 million unsecured revolving credit facility (the DGD Revolver) with a syndicate of financial institutions that matures in June 2026. DGD has the option to increase the aggregate commitments under the DGD Revolver to $550 million, subject to certain restrictions. The DGD Revolver also provides for the issuance of letters of credit of up to $150 million. The DGD Revolver is only available to fund the operations of DGD, and the creditors of DGD do not have recourse against us.
Outstanding borrowings under the DGD Revolver generally bear interest, at DGD’s option, at (i) an alternate base rate, (ii) an adjusted term SOFR, or (iii) an adjusted daily simple SOFR as allowed under the terms of the agreement for the applicable interest period in effect from time to time, plus the applicable margins. The DGD Revolver also requires payments for customary fees, including unused commitment fees, letter of credit fees, and administrative agent fees.

DGD Loan Agreement
DGD has an unsecured revolving loan agreement (the DGD Loan Agreement) with its members (Darling Ingredients Inc. (Darling) and us) with a maturity date of June 2026. Under this agreement, each member has committed $100 million, resulting in aggregate commitments of $200 million. The DGD Loan Agreement is only available to fund the operations of DGD. Any outstanding borrowings under this agreement represent loans made by the noncontrolling member as any transactions between DGD and us under this agreement are eliminated in consolidation.

Outstanding borrowings under the DGD Loan Agreement bear interest at a term SOFR for the applicable interest period in effect from time to time plus the applicable margin.

IEnova Revolver
Central Mexico Terminals, as described in Note 12, has a combined $1 billion unsecured revolving credit facility (IEnova Revolver) with IEnova (defined in Note 12), that matures in February 2028. IEnova may terminate this revolver at any time and demand repayment of all outstanding amounts; therefore, all outstanding borrowings are reflected in current portion of debt. The IEnova Revolver is only available to fund the operations of Central Mexico Terminals, and the creditors of Central Mexico Terminals do not have recourse against us.

During the year ended December 31, 2024, IEnova converted $732 million of outstanding borrowings under the IEnova Revolver to additional equity in Central Mexico Terminals, which resulted in an increase in the noncontrolling interest related to IEnova.

Outstanding borrowings under the IEnova Revolver bear interest at a term SOFR for the applicable interest period in effect from time to time plus the applicable margin. The interest rate under this revolver is subject to adjustment, with agreement by both parties, based upon changes in market conditions. As of December 31, 2025 and 2024, the variable interest rate was 7.835 percent and 8.443 percent, respectively.
Summary of Credit Facilities
We had outstanding borrowings, letters of credit issued, and availability under our credit facilities as follows (in millions):
December 31, 2025
Facility
Amount		Maturity
Date		Outstanding
Borrowings		Letters of Credit
Issued (a)		Availability
Committed facilities:
Valero Revolver$4,000 October 2030$— $2 $3,998 
Accounts receivable sales
facility
1,300 July 2026— n/a1,300 
Committed facilities of VIEs (b):
DGD Revolver400 June 2026— 29 371 
DGD Loan Agreement (c)100 June 2026— n/a100 
IEnova Revolver1,000 February 202823 n/a977 
Uncommitted facilities:
Letter of credit facilitiesn/an/an/a7 n/a
Uncommitted facility of VIE (b):
DGD letter of credit facilityn/an/an/a66 n/a
________________________
(a)Letters of credit issued as of December 31, 2025 expire at various times in 2026 through 2027.
(b)Creditors of the VIEs do not have recourse against us.
(c)The amounts shown for this facility represent the facility amount available from, and borrowings outstanding to, the noncontrolling member as any transactions between DGD and us under this facility are eliminated in consolidation.

We are charged letter of credit issuance fees under our various uncommitted short-term bank credit facilities. These uncommitted credit facilities have no commitment fees or compensating balance requirements.

Activity under our credit facilities was as follows (in millions):
Year Ended December 31,
202520242023
Borrowings:
Accounts receivable sales facility$6,250 $6,700 $1,750 
DGD Revolver650 310 550 
DGD Loan Agreement25 100 — 
IEnova Revolver— 27 120 
Repayments:
Accounts receivable sales facility(6,250)(6,700)(1,750)
DGD Revolver(650)(560)(400)
DGD Loan Agreement(25)(100)(25)
IEnova Revolver(35)— (71)
Public Debt
On February 7, 2025, we issued $650 million of 5.150 percent Senior Notes due February 15, 2030. Proceeds from this debt issuance totaled $649 million before deducting the underwriting discount and other debt issuance costs. We used a portion of the net proceeds to repay the $189 million outstanding principal balance of our 3.65 percent Senior Notes that matured on March 15, 2025 and the $251 million outstanding principal balance of our 2.850 percent Senior Notes that matured on April 15, 2025.
In March 2024, we repaid the $167 million outstanding principal balance of our 1.200 percent Senior Notes that matured on March 15, 2024.
In February 2023, we used cash on hand to purchase and retire a portion of the following notes (in millions):
Debt Purchased and RetiredPrincipal
Amount
6.625% Senior Notes due 2037
$62 
3.650% Senior Notes due 2051
26 
4.000% Senior Notes due 2052
45 
Various other Valero and VLP Senior Notes66 
Total$199 

Other Disclosures
“Interest and debt expense, net of capitalized interest” was comprised as follows (in millions):
Year Ended December 31,
202520242023
Interest and debt expense$576 $580 $611 
Less: Capitalized interest20 24 19 
Interest and debt expense, net of
capitalized interest
$556 $556 $592 
Our credit facilities and other debt arrangements contain various customary restrictive covenants, including cross-default and cross-acceleration clauses.
Principal maturities for our debt obligations as of December 31, 2025 were as follows (in millions):
2026 (a)$695 
2027564 
20281,047 
2029439 
2030850 
Thereafter4,736 
Net unamortized debt issuance costs and other(70)
Total debt$8,261 
________________________
(a)Maturities for 2026 include the IEnova Revolver.

Historical Timeline

Fiscal YearFiled
2025Feb 25, 2026Showing above
2024Feb 26, 2025
2023Feb 22, 2024
2022Feb 23, 2023
2021Feb 22, 2022
2016Feb 23, 2017
2015Feb 25, 2016

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.

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