Worthington Steel Now Owes $465 Million On An Inherited Credit Line Due In July 2027
Total debt reached $2,196.4 million at August 31, up from $256.8 million at May 31, with the largest short-dated piece coming from Kloeckner.
Worthington Steel's quarterly report shows total debt of $2,196.4 million at August 31, 2026, against $256.8 million at May 31. The biggest short-dated piece is a $465.0 million U.S. credit line that came with its purchase of control of Kloeckner and matures in July 2027.
The debt jump and its biggest short-term piece
The 10-Q puts the rise at $1,939.6 million, which it attributes mainly to financing the Kloeckner deal and consolidating Kloeckner's existing debt. The prior quarterly filing, for the period ended February 28, 2026, showed $251.4 million of debt.
The acquisition financing was $1.4 billion of secured debt, issued June 1: $700.0 million of 7.750% senior secured notes due 2033 and a $700.0 million term loan. The company paid down $200.0 million of the term loan on August 19, leaving $500.0 million outstanding.
Short-term borrowings and current maturities due within a year total $541.6 million. Of that, the ABL USA facility, an asset-backed line Kloeckner's U.S. unit took out with Bank of America, accounts for $465.0 million. Its maturity is July 14, 2027, and $138.5 million of availability remained on it.
The maturity table adds $244.5 million of long-term debt in Year 2 and $203.8 million in Year 3.
How the company plans to refinance it
The filing says the new $550.0 million revolver, which matures June 25, 2031, includes committed incremental capacity meant to bring in certain Kloeckner U.S. operations and repay the ABL USA line, subject to specified conditions. Management says it expects to handle the July 2027 maturity that way or through other financing.
Nothing was drawn on the new revolver at August 31. Availability after the borrowing base was $418.4 million.
The company says it was in compliance with its covenants at quarter end.
What the interest bill looks like
Net interest expense was $38.8 million for the quarter, against $2.9 million a year earlier. The company reported a net loss from continuing operations attributable to its controlling interest of $7.0 million, versus earnings of $36.8 million a year ago.
The debt mix includes variable-rate borrowings, and the filing says the Federal Reserve raised its benchmark rate by 25 basis points in September, after the quarter ended, to a target of 3.75% to 4.00%. It adds that the European Central Bank raised its key rates in June and again in September. Higher rates mean a bigger burden on variable-rate debt that is actually drawn, the company says.
Kloeckner shareholders are expected to vote on the domination agreement at an extraordinary meeting on October 23, 2026, and the filing says it cannot take effect before January 1, 2027.
Sources
- 10-Q Filing — Worthington Steel (WS) — SEC EDGAR
- 10-Q Filing — Worthington Steel (WS), Q3 FY2026 filed 2026-04-09 (comparison basis) — SEC EDGAR
- 10-K Filing — Worthington Steel (WS), filed 2026-07-30 (earlier disclosure) — SEC EDGAR
- 8-K Filing — Worthington Steel, filed 2026-10-07 (Items 2.02, 8.01, 9.01) — SEC EDGAR
- Earnings release (8-K Item 2.02, ws-ex99_1.htm) — Worthington Steel, filed 2026-10-07 — SEC EDGAR
