FMC (FMC) | Credit Investor

Next 12 Months: Starting Case

$ in millions	Last 12 Months	Next Quarter (4Q26E)	vs. 4Q25A	Next 12 Months	Change
Revenue	$2,815	$1,083	0.0%	$3,454	22.7%
Adj. EBITDA	($247)	$121	(34.2%)	$425	272.3%
Free Cash Flow	$370	$6	(99.0%)	($17)	(104.6%)
Net Debt, end of period	$3,229	$3,223		$3,246	0.5%
Net Debt / Adj. EBITDA	NA	NA		7.6x
Total Liquidity, end of period	$2,397	$2,403		$2,380	(0.7%)

The credit over the next year

FMC is a crop protection credit with about $4.2 billion of debt, an equity deficit after Q3 2026 write-downs, and full-year 2026 adjusted EBITDA guided to roughly negative $114 million after $672 million of channel and rebate charges. The next year turns on whether volume rebounds from the 21% underlying drop in Q3 2026 as channel customers restock, while price keeps falling mid to high single digits from generic competition and the post-patent Rynaxypyr strategy. Each point of price or volume is about $8.6 million of quarterly revenue and each point of gross margin about $8.6 million of quarterly cost, so the path back to positive EBITDA, covenant room under the amended revolver and the planned $1 billion of debt reduction from asset sales all hinge on these few numbers.

Leverage cannot be projected: Adj. EBITDA is negative or missing.
The company burns $17mm of cash over the next year on the starting case, so liquidity has to fund it.
Net debt is roughly unchanged from $3.23bn to $3.25bn.
Liquidity a year out is $2.38bn, against $2.40bn today.
Company guidance for fiscal 2026: adjusted EBITDA of -$124mm to -$104mm on its own definition, free cash flow of -$350mm to -$150mm.

Built from the inputs on the Projections tab of the model; change them there. A starting case from history, not a forecast.

Capital Structure

Cap Structure	Amt Out.	Mkt Price	Yield	Lev. Through	View
Unrestricted Cash	$735.8
Revolving Credit Facility (Fifth Amended and Restated Credit Agreement)	150.0	100.0%	N/a	NA	Bearish
8.000% Senior Secured Notes due 2031	1,200.0	100.0%	8.00%	NA	Bearish
3.450% Senior Notes due 2029	500.0	92.9%*	6.09%	NA	Bearish
5.650% Senior Notes due 2033	500.0	91.7%*	7.28%	NA	Bearish
4.500% Senior Notes due 2049	500.0	64.2%*	7.91%	NA	Bearish
6.375% Senior Notes due 2053	500.0	77.9%*	8.48%	NA	Bearish
8.450% Fixed-to-Fixed Reset Rate Subordinated Notes due 2055	750.0	74.0%*	11.58%	NA	Bearish
Short-term foreign debt	63.2	100.0%	N/a	NA	Bearish
6.45% Pollution control and industrial revenue bonds due 2032	49.9	100.0%	N/a	NA	Bearish
Foreign debt (long-term, current portion)	9.6	100.0%	N/a	NA	Bearish
Total Debt	$3,964.5			NA
Net Debt	$3,228.7			NA

Last Twelve Months

Revenue	$2,815
Implied Costs	(3,062)
Adj. EBITDA	($247)
(-) Interest Expense	(251)
(-) Capex	(56)
Memo: FCF	$370
Total Liquidity	$2,397.2

Next 12 months, starting case▲ Revenue $2.81bn → $3.45bn▲ Adj. EBITDA -$247mm → $425mm▼ Free cash flow $370mm → -$17mm▶ Net leverage NA → 7.6x▶ Liquidity $2.40bn → $2.38bn

FMC

			9/30/26						Face Value / Adj. EBITDA
Cap Structure	Coupon	Maturity	Amt Out.	Mkt Price	YTM	Next Call	Yield to Call	View	2021A	2022A	2023A	2024A	2025A	LTM	3Q27E LTM	3Q28E LTM
Unrestricted Cash			$735.8
Undrawn Revolver ($2,000mm facility)			1,661.4
Total Liquidity			$2,397.2

Revolving Credit Facility (Fifth Amended and Restated Credit Agreement)	Term SOFR/EURIBO...	6/17/2028	150.0	100.0%	N/a	N/a	N/a	Bearish
8.000% Senior Secured Notes due 2031	8.00%	6/1/2031	1,200.0	100.0%	8.00%	6/1/2028 @ 104	10.53%	Bearish
Total Secured Debt			$1,350.0						1.1x	1.0x	1.7x	1.3x	6.9x	NA	3.2x	3.0x
Net Secured Debt			$614.2						0.5x	0.5x	0.8x	0.6x	3.1x	NA	1.4x	1.3x

3.450% Senior Notes due 2029	3.45%	10/1/2029	500.0	92.9%*	6.09%	7/1/2029 @ 100	6.09%	Bearish
5.650% Senior Notes due 2033	5.65%	5/18/2033	500.0	91.7%*	7.28%	2/18/2033 @ 100	7.28%	Bearish
4.500% Senior Notes due 2049	4.50%	10/1/2049	500.0	64.2%*	7.91%	4/1/2049 @ 100	7.94%	Bearish
6.375% Senior Notes due 2053	6.375%	5/18/2053	500.0	77.9%*	8.48%	11/18/2052 @ 100	8.50%	Bearish
8.450% Fixed-to-Fixed Reset Rate Subordinated Notes due 2055	8.45%	11/1/2055	750.0	74.0%*	11.58%	8/3/2030 @ 100	17.82%	Bearish
Short-term foreign debt	12.80%	N/a	63.2	100.0%	N/a	N/a	N/a	Bearish
6.45% Pollution control and industrial revenue bonds due 2032	6.45%	N/a	49.9	100.0%	N/a	N/a	N/a	Bearish
Foreign debt (long-term, current portion)	12.30%	N/a	9.6	100.0%	N/a	N/a	N/a	Bearish
Other debt, discounts and issuance costs	N/a	N/a	(258.2)
Total Debt			$3,964.5						3.1x	3.0x	4.9x	3.9x	20.1x	NA	9.3x	8.7x
Net Debt			$3,228.7						2.6x	2.5x	4.0x	3.2x	16.4x	NA	7.6x	7.1x
						Adj. EBITDA			$1,264	$1,312	$814	$1,010	$197	($247)	$425	$457

Key Financials

	2021A	2022A	2023A	2024A	2025A	LTM	3Q27E LTM	3Q28E LTM
Revenue	$5,045	$5,802	$4,487	$4,246	$3,467	$2,815	$3,454	$3,497
Y/Y Growth		15.0%	(22.7%)	(5.4%)	(18.3%)		22.7%	1.2%
(-) Cost of Revenue	(2,884)	(3,476)	(2,656)	(2,597)	(2,184)	(2,197)	(2,167)	(2,182)
Gross Profit	$2,161	$2,327	$1,831	$1,649	$1,283	$618	$1,286	$1,315
Gross Margin	42.8%	40.1%	40.8%	38.8%	37.0%	22.0%	37.2%	37.6%
(-) SG&A	(714)	(775)	(734)	(645)	(685)	(705)	(688)	(678)
(+/-) Other Operating Costs, net of D&A	(242)	(238)	(357)	(322)	(2,053)	(2,475)	(197)	(205)
EBITDA	$1,205	$1,314	$740	$683	($1,455)	($2,562)	$401	$433
(+) Add-backs: stock comp, restructuring, impairments	59	(2)	74	327	1,652	2,316	24	24
Adj. EBITDA	$1,264	$1,312	$814	$1,010	$197	($247)	$425	$457
Margin	25.1%	22.6%	18.1%	23.8%	5.7%	(8.8%)	12.3%	13.1%
(-) Restructuring and other cash add-backs	(41)	26	(48)	(303)	(272)	(605)	--	--
Cash EBITDA	$1,223	$1,338	$766	$707	($75)	($852)	$425	$457
(-) Interest Expense (Cash Only)	(126)	(144)	(230)	(232)	(237)	(251)	(297)	(297)
(-) Cash Taxes	(139)	(122)	(180)	(156)	(196)	(77)	(77)	(77)
(-) Capex	(100)	(142)	(134)	(68)	(96)	(56)	(68)	(69)
(+/-) Working Capital and Other	(60)	(412)	(656)	419	502	1,605	--	--
Memo: FCF	$799	$518	($434)	$669	($103)	$370	($17)	$14
% of Debt	20.1%	13.1%	(11.0%)	16.9%	(2.6%)	9.3%	(0.4%)	0.3%

Liquidity

Unrestricted Cash	$735.8
Undrawn Revolver	1,661.4
Total Liquidity	$2,397.2
(-) Debt due through 2028	(150.0)
(+/-) Free cash flow, last twelve months	370.1
Liquidity after maturities and a year of cash flow	$2,617.3

Tranches are from the debt table in the latest quarterly or annual report.Blue figures are inputs in the model. Price is 100% of face unless marked *, which is a bond fund's own valuation from its SEC holdings report, not a traded price.Secured and unsecured are judged from each instrument's name. Adj. EBITDA is operating income plus D&A, stock compensation, restructuring and impairment charges as tagged in SEC filings; it is not the company's own adjusted figure. Free cash flow is cash from operations less capital spending.

The basket review for this company has not finished yet. When it does, this tab shows the dollar capacity to move value or prime lenders, the playbook moves that fit, and what they would do to each tranche. Meanwhile, see the liability management playbook.

Key Financials

	2021A	2022A	2023A	2024A	2025A	LTM	3Q27E LTM	3Q28E LTM
Revenue	$5,045	$5,802	$4,487	$4,246	$3,467	$2,815	$3,454	$3,497
Y/Y Growth		15.0%	(22.7%)	(5.4%)	(18.3%)		22.7%	1.2%
(-) Cost of Revenue	(2,884)	(3,476)	(2,656)	(2,597)	(2,184)	(2,197)	(2,167)	(2,182)
Gross Profit	$2,161	$2,327	$1,831	$1,649	$1,283	$618	$1,286	$1,315
Gross Margin	42.8%	40.1%	40.8%	38.8%	37.0%	22.0%	37.2%	37.6%
(-) SG&A	(714)	(775)	(734)	(645)	(685)	(705)	(688)	(678)
(+/-) Other Operating Costs, net of D&A	(242)	(238)	(357)	(322)	(2,053)	(2,475)	(197)	(205)
EBITDA	$1,205	$1,314	$740	$683	($1,455)	($2,562)	$401	$433
(+) Add-backs: stock comp, restructuring, impairments	59	(2)	74	327	1,652	2,316	24	24
Adj. EBITDA	$1,264	$1,312	$814	$1,010	$197	($247)	$425	$457
Margin	25.1%	22.6%	18.1%	23.8%	5.7%	(8.8%)	12.3%	13.1%
(-) Restructuring and other cash add-backs	(41)	26	(48)	(303)	(272)	(605)	--	--
Cash EBITDA	$1,223	$1,338	$766	$707	($75)	($852)	$425	$457
(-) Interest Expense (Cash Only)	(126)	(144)	(230)	(232)	(237)	(251)	(297)	(297)
(-) Cash Taxes	(139)	(122)	(180)	(156)	(196)	(77)	(77)	(77)
(-) Capex	(100)	(142)	(134)	(68)	(96)	(56)	(68)	(69)
(+/-) Working Capital and Other	(60)	(412)	(656)	419	502	1,605	--	--
Memo: FCF	$799	$518	($434)	$669	($103)	$370	($17)	$14
% of Debt	20.1%	13.1%	(11.0%)	16.9%	(2.6%)	9.3%	(0.4%)	0.3%

Key Drivers

Driver	4Q25A	1Q26A	2Q26A	3Q26A	4Q26E	1Q27E	2Q27E	3Q27E	4Q27E	1Q28E	2Q28E	3Q28E	Sensitivity	Next 12m impact ($mm)
Sales volume change % change in revenue from volume, year over year	-1	2	-10	-21	8	2	4	0	3	3	3	0	$8.6mm on revenue	120
Price change % change in revenue from price, year over year	-6	-6	-7	-2	-8	-2	-2	-2	-1	-1	-1	-1	$8.6mm on revenue	(120)
Q3 2026 commercial action charge $ millions of revenue	0	0	0	-639	0	0	0	639	0	0	0	0	$1.0mm on revenue	639
Gross margin % of revenue	39.8	32.5	39.5	36.3	39.8	36.5	43.5	40.3	43.8	36.5	43.5	40.3	$-8.6mm on cost of revenue	(103)
SG&A expense $ millions per quarter	168.7	185.1	179.1	172.3	170.0	168.0	166.0	162.0	160.0	160.0	160.0	160.0	$1.0mm on SG&A	(39)

FMC is a crop protection credit with about $4.2 billion of debt, an equity deficit after Q3 2026 write-downs, and full-year 2026 adjusted EBITDA guided to roughly negative $114 million after $672 million of channel and rebate charges. The next year turns on whether volume rebounds from the 21% underlying drop in Q3 2026 as channel customers restock, while price keeps falling mid to high single digits from generic competition and the post-patent Rynaxypyr strategy. Each point of price or volume is about $8.6 million of quarterly revenue and each point of gross margin about $8.6 million of quarterly cost, so the path back to positive EBITDA, covenant room under the amended revolver and the planned $1 billion of debt reduction from asset sales all hinge on these few numbers.

Bottoms-Up Projections: starting case

$ in millions	4Q25A	1Q26A	2Q26A	3Q26A	4Q26E	1Q27E	2Q27E	3Q27E	4Q27E	1Q28E	2Q28E	3Q28E
Revenue	$1,083	$759	$867	$106	$1,083	$759	$884	$728	$1,101	$776	$902	$719
Y/Y Growth	(11.5%)	(4.1%)	(17.5%)	(80.5%)	0.0%	0.0%	2.0%	587.2%	1.6%	2.3%	1.9%	(1.2%)
Adj. EBITDA	$184	$93	$78	($601)	$121	$131	$108	$66	$160	$132	$106	$59
Margin	17.0%	12.2%	8.9%	(567.1%)	11.2%	17.2%	12.2%	9.0%	14.5%	17.0%	11.8%	8.2%
Free Cash Flow	$631	($618)	$358	($1)	$6	$22	($3)	($42)	$45	$23	($5)	($49)
Cash, end of period	585	391	477	736	742	764	761	719	763	787	781	733
Total Debt, end of period	3,355	3,361	3,964	3,965	3,965	3,965	3,965	3,965	3,965	3,965	3,965	3,965
Net Debt / Adj. EBITDA	14.1x	17.5x	60.4x	NA	NA	NA	NA	7.6x	6.9x	6.8x	6.9x	7.1x

Revenue is built from Insecticides, Fungicides, Plant Health, Product and Service Other, Herbicides, each driven by volume and by price and mix against the same quarter a year earlier. Every cost line, interest, taxes, capital spending and working capital has its own input on the Projections tab of the model. This is a starting case built from history, not a forecast.

Earnings call: Q3 2026 · Oct 30, 2026

Slides Webcast and audio replay Prepared remarks Investor relations site

FMC took a $672 million EBITDA hit to reset channel pricing, cut its Q4 and full-year outlook, and gave first 2027 and 2028 EBITDA ranges.

Takeaways

Q3 revenue was $106 million after a $639 million charge for commercial actions. Underlying sales, excluding India and the charge, were $745 million, down 22% on volume.
Adjusted EBITDA was negative $559 million. Before the $672 million charge it was $113 million, below guidance. GAAP net loss was $2.07 billion, including about $809 million of deferred tax asset write-downs and a $288 million Rynaxypyr intangible impairment.
About $500 million of the charge comes from moving North America to a lower gross price, lower rebate model. Management says it does not change future cash. The other $175 million cuts prices on high-priced channel inventory in the Americas and will reduce future collections.
Q3 free cash flow was negative $18 million. Full-year free cash flow guidance is now negative $350 million to negative $150 million, including about $180 million of restructuring cash.
Gross debt was about $4.2 billion and cash $736 million, for net debt near $3.4 billion. A $403 million equity sale to Tessenderlo Group closed September 23, giving it about 20% of the shares.
Covenant headroom is thin. Interest coverage was 2.3x against a 2.0x minimum, and pro forma total leverage of 6.1x compares with a 6.75x limit that returns at year-end 2026. The company plans to talk to banks about more covenant flexibility.

Debt and capital

Gross debt about $4.2 billion at September 30, up $103 million from year-end 2025. Net debt about $3.4 billion, down $48 million.
Secured debt to covenant EBITDA was 1.4x versus a 3.5x limit. Interest coverage was 2.3x versus a 2.0x minimum. Total leverage would have been 6.1x versus the 6.75x test that resumes December 31, 2026.
Covenant EBITDA adds back the commercial action charges. Management expects to stay in compliance at year-end and through 2027, but intends to seek further covenant changes from the bank group.
Amendment No. 8 to the credit agreement (October 15) requires India sale proceeds to repay credit agreement debt or fund general purposes, and conditionally releases some guarantors and collateral.
The India business sale to Crystal Crop Protection ($252 million headline) targets a December 1 close. A sale-leaseback of the Delaware site is also expected by year-end.
Year-end 2026 net debt is targeted near $3.1 billion with no revolver balance. The company will prioritize liquidity and largely self-fund the first-half 2027 working capital build.

Guidance

Q4 2026 revenue excluding India cut to $1.04 billion to $1.14 billion, about flat year on year at the midpoint, with a high-single-digit price decline.
Q4 2026 Adjusted EBITDA cut to $210 million to $230 million, down 22% at the midpoint. Q4 adjusted EPS cut to $0.56 to $0.70.
Full-year 2026 revenue excluding India now $2.75 billion to $2.85 billion. Adjusted EBITDA now negative $124 million to negative $104 million, including the Q3 charge.
Full-year 2026 free cash flow cut to negative $350 million to negative $150 million. Interest expense guided to $270 million to $280 million; D&A held at $160 million to $170 million.
New preliminary view: 2027 Adjusted EBITDA of $650 million to $730 million and 2028 of about $760 million to $840 million. Formal 2027 guidance is due in February.

Tone: Defensive and reset-focused: management framed the charges as a one-time clean-up, stressed liquidity and covenant compliance, and asked investors to judge it on execution.

Q2 2026Slides · Webcast
Q1 2026Slides · Webcast
Q4 2025Slides · Webcast

Summary written with AI from Company-published prepared remarks for the October 30, 2026 call (no Q&A), plus the Q3 press release and the October 15 update, both filed with the SEC.. Slides, audio and any transcript are the company's and open on its own site. Full transcripts from transcript vendors are not reproduced here.

Last quarter: Third quarter 2026

Pricing and rebate resets in the channel wiped out third-quarter sales and drove Adjusted EBITDA to negative $559mm; full-year guidance was cut again.

Results

Revenue was $106mm versus $542mm a year earlier, including about $639mm of negative impact from the commercial actions announced on October 15.
Adjusted EBITDA was negative $559mm versus $236mm a year earlier; the company puts the commercial-action hit at about $672mm, leaving underlying Adjusted EBITDA of $113mm.
GAAP net loss was $2.07bn, driven by $809mm of deferred tax asset valuation allowances, a $288mm intangible impairment and $176mm of restructuring charges.
Free cash flow was negative $18mm versus negative $233mm a year earlier, helped by working capital; operating cash flow was $7mm and capex was $8mm.
Excluding India and the commercial actions, revenue was $745mm, down 22%, with volume down 21% and price down 2%.

Why

About $500mm of the EBITDA charge closes out the old North America high-gross-price, high-rebate model and reprices channel inventory toward the new net price model effective October 1.
About $175mm reflects price cuts on high-priced products already held by distributors in Brazil, the US, Canada and Argentina; this is the only piece expected to reduce future cash collections.
Channel customers in several key markets sharply cut replenishment orders late in the quarter, citing high financing costs, ample supply and uncertain demand.
Generic competition has pushed market prices down, and the company expects a high-single-digit price decline again in the fourth quarter.

Balance sheet and guidance

Cash was $736mm at September 30, up from $585mm at year end; total debt was $4.18bn, of which $223mm is current.
FMC stockholders' equity was negative $19mm after the quarter's write-downs, versus $3.77bn a year earlier.
The Tessenderlo equity investment closed in September; the India business sale for $252mm is still expected to close in 2026.
Full-year 2026 revenue excluding India cut to $2.75bn to $2.85bn, from $3.50bn to $3.70bn in July.
Full-year 2026 Adjusted EBITDA cut to negative $124mm to negative $104mm, from $620mm to $680mm in July.
Full-year 2026 free cash flow cut to negative $350mm to negative $150mm, from $75mm to $225mm in July; this includes about $180mm of restructuring spend.
Fourth-quarter revenue excluding India of $1.04bn to $1.14bn and Adjusted EBITDA of $210mm to $230mm, both described as lowered.

What to watch

Bank covenant talks: the October 15 release said FMC would seek further covenant modifications over the next year while the commercial actions are implemented (https://www.sec.gov/Archives/edgar/data/37785/000003778526000149/ex99110152026.htm).
Whether fourth-quarter Adjusted EBITDA lands in the $210mm to $230mm range; it is the only positive quarter left in a negative full-year EBITDA outlook.
Cash collections as the $175mm of channel price cuts flows through and accrued customer rebates of $812mm are settled under the old North America model.

From the company's press release filed Oct 29, 2026. Figures in this section are as the company reports them, including its own adjusted EBITDA.

Filings

Earnings releases 8

Oct 29, 20268-K for Oct 29, 2026: Results · Press release
Oct 15, 20268-K for Oct 15, 2026: Results · Press release
Jul 29, 20268-K for Jul 29, 2026: Results · Press release
Apr 29, 20268-K for Apr 29, 2026: Results · Press release
Feb 4, 20268-K for Feb 4, 2026: Results · Press release
Oct 29, 20258-K for Oct 29, 2025: Results · Press release
Jul 30, 20258-K for Jul 30, 2025: Results · Press release
Apr 30, 20258-K for Apr 30, 2025: Results · Press release

Annual reports (10-K) 5

Quarterly reports (10-Q) 12

Current reports (8-K) 20

Oct 21, 20268-K for Oct 21, 2026: Director or officer change
Oct 21, 20268-K for Oct 15, 2026: Material agreement; New debt
Sep 23, 20268-K for Sep 23, 2026: Material agreement; Equity sold; Regulation FD
Jul 1, 20268-K for Jun 30, 2026: Material agreement; Equity sold; Regulation FD
Jun 23, 20268-K for Jun 16, 2026: Material agreement; New debt
Jun 23, 20268-K for Jun 18, 2026: Material agreement
Jun 5, 20268-K for Jun 5, 2026: Material agreement; New debt
May 21, 20268-K for May 21, 2026: Other event
May 19, 20268-K for May 19, 2026: Other event
Apr 29, 20268-K for Apr 28, 2026: Director or officer change; Bylaw change; Shareholder vote
Apr 20, 20268-K for Apr 16, 2026: Material agreement; New debt
Dec 12, 20258-K for Dec 12, 2025: Restructuring; Impairment
Dec 9, 20258-K for Dec 8, 2025: Material agreement; New debt
Dec 3, 20258-K for Dec 3, 2025: Director or officer change
Oct 29, 20258-K for Oct 29, 2025: Director or officer change; Regulation FD
May 28, 20258-K for May 27, 2025: Material agreement; New debt
May 21, 20258-K for May 19, 2025: Other event
Apr 30, 20258-K for Apr 29, 2025: Shareholder vote
Apr 22, 20258-K for Apr 22, 2025: Director or officer change
Feb 11, 20258-K for Feb 11, 2025: Material agreement; New debt

Proxy statements 3

Other filings 7

May 21, 2025424B2
May 19, 2025424B5
May 17, 2023424B2
May 15, 2023424B5
May 15, 2023424B5
Sep 19, 2019424B2
Sep 17, 2019424B5

Links open the document on SEC EDGAR. Earnings call transcripts are not SEC filings and belong to their publishers, so they are not reproduced here; the press release and slides filed with each results 8-K are.

Rating actions

Invalid DateMoody's, S&P and Fitch: Long-term ratings downgraded below investment grade. The company says the agencies cut it to high yield on higher leverage, generic competition in crop protection and weaker earnings. · source

Coming up

Feb 26, 2027Results. Full-year results for the period ending 2026-12-31. The date is an estimate: last year's filing date moved forward a year.
Jun 17, 2028Maturity. Revolving Credit Facility (Fifth Amended and Restated Credit Agreement): $150mm outstanding comes due.

Recent 8-K filings

Oct 29, 2026Reported results
Oct 21, 2026Director or officer change
Oct 21, 2026Entered into a material agreement; Took on new debt or an obligation
Oct 15, 2026Reported results
Sep 23, 2026Entered into a material agreement; Sold unregistered equity; Regulation FD disclosure
Jul 29, 2026Reported results
Jul 1, 2026Entered into a material agreement; Sold unregistered equity; Regulation FD disclosure
Jun 23, 2026Entered into a material agreement; Took on new debt or an obligation