Valvoline Inc. Closes $600M 6.125% Senior Notes Offering; Amends Credit Facility

What Happened

• Valvoline Inc. announced it closed an offering of $600 million aggregate principal of 6.125% senior unsecured notes due August 15, 2034. The Notes are unsubordinated, unsecured obligations of Valvoline and are guaranteed by subsidiaries that already guarantee Valvoline’s existing senior secured credit facilities or its 3.625% senior notes due 2031. The Notes were sold to qualified institutional buyers under Rule 144A and to non‑U.S. persons under Regulation S and are not registered under the Securities Act.
• Proceeds from the Offering will be used to repay in full Valvoline’s senior secured Term Loan A, to partially repay Term Loan B, to pay related fees and expenses, and for general corporate purposes. U.S. Bank Trust Company, N.A. acts as trustee under the new Indenture.
• On the same date (August 24, 2026), Valvoline entered into Amendment No. 2 to its Credit Agreement, increasing the revolving credit facility availability, reducing pricing, extending the facility term, and adjusting leverage covenant levels.

Key Details

• $600 million — principal amount of new 6.125% senior notes due August 15, 2034.
• Use of proceeds — repay Term Loan A in full and partially repay Term Loan B; pay fees/expenses; remainder for general corporate purposes.
• Revolver increase — availability raised from $475 million to $600 million; facility maturity extended to five years after August 24, 2026 (i.e., Aug 24, 2031) and pricing reduced.
• Leverage covenant change — maximum consolidated net leverage ratio increased from 4.50:1.00 to 5.00:1.00, stepping down to 4.75:1.00 in year three and 4.50:1.00 in year four; allows a 0.50:1.00 increase following a material acquisition.

Why It Matters

• The transactions materially alter Valvoline’s debt and liquidity profile: the new notes refinance term debt (reducing near-term term loan balances) while adding a long‑dated unsecured note with a fixed 6.125% coupon through 2034, which fixes a portion of interest costs over a longer horizon.
• Expanding the revolving credit from $475M to $600M and extending its maturity improves near‑term liquidity and gives the company more working capital flexibility. However, the higher initial leverage covenant (up to 5.00:1.00) provides added covenant room now but allows higher leverage than before until it steps down later, which investors should note when assessing leverage and credit risk.
• The Notes are limited to institutional and non‑U.S. buyers (Rule 144A/Reg S), meaning they were privately placed rather than publicly registered.