FMC Closes $1.2 Billion in 8% Secured Notes to Refinance Maturing Debt
Distressed
Company Background
FMC Corporation is a Philadelphia-based global agricultural sciences company that makes herbicides, insecticides, fungicides, and biologicals for growers worldwide. Revenue for full-year 2025 was $3.47 billion. The company has been under severe financial stress for more than a year: a $1.356 billion goodwill impairment triggered by its stock-price decline drove a GAAP net loss of $2.24 billion in 2025, and the first quarter of 2026 added another $281 million GAAP loss, partly driven by a $124.7 million increase in valuation allowances on Swiss deferred tax assets. Free cash flow was negative $628 million in Q1 2026 alone.
The company has run two overlapping restructuring programs simultaneously. An older initiative called Project Focus has been running for years; in December 2025 the board approved a second plan, Project Foundation, expecting $560 million to $635 million in pre-tax charges with actions substantially complete by end of 2027. In response to commercial challenges in India, FMC wrote down its India commercial business by approximately $510 million in Q3 2025 and classified those assets as held for sale. In October 2025 it cut its quarterly dividend to $0.08 per share. President Ronaldo Pereira departed December 15, 2025. In February 2026 the board authorized an exploration of strategic alternatives, including but not limited to a sale of the company.
What Was Disclosed
FMC completed on June 5, 2026 a private offering of $1.2 billion aggregate principal amount of 8.000% Senior Secured Notes due June 1, 2031, with estimated net proceeds of approximately $1.185 billion after underwriting discounts and expenses. The notes were issued at par and pay interest semi-annually beginning December 1, 2026. The indenture was entered into with U.S. Bank Trust Company, National Association, acting as both trustee and notes collateral agent.
The offering was originally announced at $750 million on May 19, 2026. By the time it priced on June 5 — seventeen days later — the deal had grown to $1.2 billion, a 60% increase in size. Proceeds are earmarked primarily to repurchase or redeem FMC's outstanding 3.200% Senior Notes due October 1, 2026, repay borrowings under its credit facility, and repay other debt. The notes are secured by first-priority liens on substantially all assets of FMC and its subsidiary guarantors organized under the laws of the United States, Canada, and Switzerland, as well as all equity interests held by Singapore and Netherlands subsidiary guarantors in their respective subsidiaries. Guarantees are provided jointly and severally by subsidiaries across those five jurisdictions.
The indenture contains extensive negative covenants restricting FMC's ability to incur additional debt, pay dividends, sell assets, incur liens, or merge. A change of control requires an offer to repurchase all outstanding notes at 101% of principal; proceeds from asset sales or casualty events must be offered pro rata at par. The company may redeem the notes prior to June 1, 2028 at par plus a make-whole premium, or in an amount up to 40% of aggregate principal from equity offering proceeds at the stated redemption price. After June 1, 2028, redemption is at prices set out in the indenture.
Why It Matters
The secured nature of this offering represents a material change in FMC's capital structure. Amendment No. 6 to FMC's credit agreement, entered into on April 16, 2026, had already added subsidiary guarantors and granted security interests in assets to the bank syndicate — the company's first formal collateral pledge to lenders. The new notes create an equivalent first-priority lien structure for bond investors, meaning FMC's unencumbered asset base has now been substantially reduced on two fronts simultaneously. The credit agreement was amended twice in under five months: Amendment No. 5 on December 8, 2025 modified leverage and coverage covenants and extended a covenant relief period to as late as December 31, 2028; Amendment No. 6 in April further modified covenant ratios and established a maximum secured leverage ratio of 3.50 to 1.00. Amendment No. 5 had also included a springing-lien provision that would have compelled FMC to pledge substantially all assets if its public debt rating fell below BB+ from S&P or Fitch, or Ba1 from Moody's — that trigger is now moot because the collateral has been pledged regardless.
Total debt stood at $4.53 billion as of March 31, 2026. The 3.200% notes that the new proceeds will retire were due October 1, 2026, meaning FMC faced an imminent maturity that could not be met from operations given negative operating cash flow. Replacing those notes with 8% secured paper extends the wall to 2031 but at a substantially higher annual interest cost and by pledging the company's asset base to bondholders. The cost of the new notes also compounds FMC's interest burden at a time when management guided adjusted EBITDA for full-year 2026 in the range of $670 million to $730 million — a figure that must now service considerably more expensive debt. The board's strategic alternatives review, which includes a potential sale, remains active, and the indenture's change-of-control provision at 101% would give bond investors a repurchase right if a transaction were completed at a price that triggers that clause.