6 unchanged sentences
however, this is mitigated to the extent our loans bear interest at a floating rate.
−Removed: As of June 30, 2022, a decrease of 50 bps or increase of 50 bps of the market yield would have resulted in a change in unrealized gain (loss) of approximately $0.5 million and $(0.5) million, respectively.
−Removed: As of June 30, 2022, we had five floating-rate loans, representing approximately 29% of our portfolio based on aggregate outstanding principal balances.
+Added: As of September 30, 2022 , a decrease of 50 bps or increase of 50 bps of the market yield would have resulted in a change in unrealized gain (loss) of approximately $0.5 million and $(0.5) million, respectively.
+Added: As of September 30, 2022 , we had five floating-rate loans, representing approximately 31% of our portfolio based on aggregate outstanding principal balances.
These floating benchmark rates include one-month LIBOR subject to a weighted average floor of 1.0% and quoted at 3.143%, one-month Secured Overnight Financing Rate (“SOFR”) subject to a weighted average floor of 1.0%, and quoted at 3.042% and U.S.
−Removed: Prime Rate subjected to a weighted average floor of 4.0% quoted at 4.750%.
+Added: Prime Rate subject to a weighted average floor of 4.4% quoted at 6.250%.
We estimate that a hypothetical 100 basis points increase in the floating benchmark rate would result in an increase in annual interest income of approximately $1.4 million and a hypothetical 100 basis points decrease in the floating benchmark rate would result in a decrease in annual interest income of approximately $(1.4) million.
Potential Impact of LIBOR Transition
−Removed: As of June 30, 2022, five of our loans, representing approximately 29% of our portfolio based on aggregate outstanding principal balances, paid interest at a variable rate tied to either LIBOR, SOFR, or U.S.
+Added: As of September 30, 2022 , five of our loans, representing approximately 31% of our portfolio based on aggregate outstanding principal balances, paid interest at a variable rate tied to either LIBOR, SOFR, or U.S.
If one of these floating benchmarks are no longer available, our applicable loan documents generally allow us to choose a new index based upon comparable information.
6 unchanged sentences
We may carry our loans at fair value or carrying value in our consolidated balance sheet.
−Removed: As of June 30, 2022 and December 31, 2021, three of our loans held for investment were carried at fair value within loans held at fair value in our consolidated balance sheets, with changes in fair value recorded through earnings.
+Added: As of September 30, 2022 and December 31, 2021 , three of our loans held for investment were carried at fair value within loans held at fair value in our consolidated balance sheets, with changes in fair value recorded through earnings.
We evaluate our loans on a quarterly basis and fair value is determined by our Board through its independent Audit and Valuation Committee.
10 unchanged sentences
Additionally, the fair value of our loans may differ significantly from the values that would have been used had a ready market existed for such loans and may differ materially from the values that we may ultimately realize.
−Removed: Further, such loans are generally subject to legal and other restrictions on resale or otherwise are less liquid than publicly traded securities.
+Added: Further, such loans are generally subject to legal and other restrictions on resale or
+Added: otherwise are less liquid than publicly traded securities.
If we were required to liquidate our investment in a loan in a forced or liquidation sale, we could realize significantly less than the value at which we had recorded such loan investment.
34 unchanged sentences
As a result, we cannot predict the percentage of our capital that will be invested in any individual target investment at any given time.
−Removed: Our loan portfolio as of June 30, 2022 was concentrated with the top four borrowers representing approximately 64.1% of the aggregate outstanding principal balances and approximately 64.6% of the total loan commitments.
+Added: Our loan portfolio as of September 30, 2022 was concentrated with the top four borrowers representing approximately 63.6% of the aggregate outstanding principal balances and approximately 63.8% of the total loan commitments.
Additionally, the industry is experiencing significant consolidation, which we expect to continue, among cannabis operations and certain of our borrowers may combine, increasing the concentration of our borrower portfolio with those consolidated operators.
−Removed: Our largest credit facility represented approximately 17.9% of our total loan commitments and approximately 20.4% of the aggregate outstanding principal balances of our portfolio as of June 30, 2022 and the borrower under this credit facility is Public Company F, a multi-state operator with real estate assets in several states, certain of which have been included as collateral in connection with the senior term loan.
−Removed: Our portion of the senior term loan provided to such borrower had an aggregate principal amount of $86.6 million outstanding as of June 30, 2022.
+Added: Our largest credit facility represented approximately 17.2% of our total loan commitments and approximately 19.4% of the aggregate outstanding principal balances of our portfolio as of September 30, 2022.
+Added: The borrower under this credit facility is Public Company F, a multi-state operator with real estate assets in several states, certain of which have been included as collateral in connection with the senior term loan.
+Added: Our portion of the senior term loan provided to such borrower had an aggregate principal amount of $86.6 million outstanding as of September 30, 2022 .
This senior term loan accrues interest at a blended rate of 8.6% per annum, payable in cash, across the three tranches of the senior term loan facility.
The Public Company F senior term loan is managed by a third-party agent, acting as sole lead arranger, administrative agent and collateral agent, which is an affiliate of one of the other lender parties.
+Added: Subsequent to the end of the third quarter, Public Company F repaid its loan in full.
+Added: Refer to Note 17 to our unaudited interim consolidated financial statements titled “Subsequent Events” for more information.
In June 2016, the FASB issued Accounting Standards Update (“ASU”) No.
4 unchanged sentences
The CECL Reserve related to outstanding balances on loans held for investment required under ASU No.
−Removed: 2016-13 is a valuation
−Removed: account that is deducted from the amortized cost basis of our loans held at carrying value and loans receivable at carrying value in our consolidated balance sheet.
−Removed: The CECL Reserve related to unfunded commitments on loans held at carrying value is recorded within accounts payable and other liabilities in our consolidated balance sheet.
+Added: 2016-13 is a valuation account that is deducted from the amortized cost basis of our loans held at carrying value and loans receivable at carrying value in our consolidated balance sheet.
+Added: The CECL Reserve related to unfunded commitments on loans held at carrying value is recorded within current expected credit loss reserve as a liability in our consolidated balance sheet.
Refer to Note 6 to our unaudited interim consolidated financial statements titled “Current Expected Credit Losses” for more information on CECL.
−Removed: We provide loans to companies operating in the cannabis industry which involves significant risks, including the risk of strict enforcement against our borrowers of the federal illegality of cannabis, our borrowers’ inability to renew or otherwise maintain their licenses or other requisite authorizations for their cannabis operations, and such loans lack of liquidity, and we could lose all or part of any of our loans.
−Removed: Our ability to grow or maintain our business depends on state laws pertaining to the cannabis industry.
+Added: We primarily provide loans to companies operating in the cannabis industry which involves significant risks, including the risk of strict enforcement against our borrowers of the federal illegality of cannabis, our borrowers’ inability to renew or otherwise maintain their licenses or other requisite authorizations for their cannabis operations, and such loans lack of liquidity, and we could lose all or part of any of our loans.
+Added: Our ability to grow or maintain our core business depends on state laws pertaining to the cannabis industry.
New laws that are adverse to our borrowers may be enacted, and current favorable state or national laws or enforcement guidelines relating to cultivation, production and distribution of cannabis may be modified or eliminated in the future, which would impede our ability to grow and could materially adversely affect our business.
5 unchanged sentences
changes or continued weakness in specific industry segments;
−Removed: construction quality, age and design;
+Added: quality, age and design;
demographic factors;
10 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.