11 unchanged sentences
therefore, changes in the fair value of interest rate derivative financial instruments are recorded as a component of interest expense in gain or loss in fair value of derivative financial instruments in our accompanying condensed consolidated statements of operations.
−Removed: As of September 30, 2020, our interest rate swap liabilities are recorded in our accompanying condensed consolidated balance sheets at their aggregate fair value of $6,687,000.
+Added: As of March 31, 2021, our interest rate swap liabilities are recorded in our accompanying condensed consolidated balance sheets at their aggregate fair value of $3,800,000.
We will not enter into derivatives or interest rate transactions for speculative purposes.
1 unchanged sentence
As a result, the Federal Reserve Board and the Federal Reserve Bank of New York organized the Alternative Reference Rates Committee, which identified the Secured Overnight Financing Rate, or SOFR, as its preferred alternative to United States dollar LIBOR in derivatives and other financial contracts.
−Removed: We are not able to predict when LIBOR will cease to be available or when there will be sufficient liquidity in the SOFR markets.
−Removed: Any changes adopted by the FCA or other governing bodies in the method used for determining LIBOR may result in a sudden or prolonged increase or decrease in reported LIBOR.
−Removed: If that were to occur, our interest payments could change.
−Removed: In addition, uncertainty about the extent and manner of future changes may result in interest rates and/or payments that are higher or lower than if LIBOR were to remain available in its current form.
+Added: In March 2021, the FCA confirmed its intention to cease publishing one-week and two-month LIBOR after December 31, 2021 and all remaining LIBOR after June 30, 2023.
+Added: At this time, it is not known whether or when SOFR or other alternative reference rates will attain market traction as replacements for LIBOR.
We have variable rate debt outstanding under our credit facilities and derivative financial instruments maturing on November 19, 2021 that are indexed to LIBOR.
1 unchanged sentence
These risks arise in connection with transitioning contracts to a new alternative rate, including any resulting value transfer that may occur.
−Removed: The value of loans or derivative instruments tied to LIBOR could also be impacted if LIBOR is limited or discontinued.
+Added: The value of loans or derivative instruments tied to LIBOR could also be impacted if LIBOR is discontinued.
For some instruments, the method of transitioning to an alternative rate may be challenging, as they may require negotiation with the respective counterparty.
If a contract is not transitioned to an alternative rate and LIBOR is discontinued, the impact on our contracts is likely to vary.
−Removed: If LIBOR is discontinued or if the methods of calculating LIBOR change from their current form, interest rates on our current or future indebtedness may be adversely affected.
−Removed: While we expect LIBOR to be available in substantially its current form until the end of 2021, it is possible that LIBOR will become unavailable prior to that point.
+Added: If LIBOR is discontinued, interest rates on our current or future indebtedness may be adversely affected.
+Added: It is not possible to predict whether LIBOR will continue to be viewed as an acceptable market “benchmark” prior to June 30, 2023, and it is possible that LIBOR will become unavailable prior to that point.
This could result, for example, if a sufficient number of banks decline to make submissions to the LIBOR administrator.
In that case, the risks associated with the transition to an alternative reference rate will be accelerated and magnified.
−Removed: As of September 30, 2020, the table below presents the principal amounts and weighted average interest rates by year of expected maturity to evaluate the expected cash flows and sensitivity to interest rate changes.
+Added: As of March 31, 2021, the table below presents the principal amounts and weighted average interest rates by year of expected maturity to evaluate the expected cash flows and sensitivity to interest rate changes.
Expected Maturity Date
6 unchanged sentences
$ 481,400,000 $ — $ — $ — $ — $ — $ 481,400,000 $ 481,716,000
−Removed: Weighted average interest rate on maturing variable-rate debt (based on rates in effect as of September 30, 2020)
−Removed: — % 2.12 % — % — % — % — % 2.12 % —
+Added: Weighted average interest rate on maturing variable-rate debt (based on rates in effect as of March 31, 2021) 2.08 % — % — % — % — % — % 2.08 % —
Mortgage Loans Payable, Net and Line of Credit and Term Loans
−Removed: Mortgage loans payable was $18,933,000 ($17,974,000, net of discount/premium and deferred financing costs) as of September 30, 2020.
−Removed: As of September 30, 2020, we had three fixed-rate mortgage loans payable with interest rates ranging from 3.67% to 5.25% per annum.
−Removed: In addition, as of September 30, 2020, we had $479,500,000 outstanding under our line of credit and term loans at a weighted average interest rate of 2.12% per annum.
−Removed: As of September 30, 2020, the weighted average effective interest rate on our outstanding debt, factoring in our fixed-rate interest rate swaps, was 3.37% per annum.
+Added: Mortgage loans payable was $18,628,000 ($17,708,000, net of discount/premium and deferred financing costs) as of March 31, 2021.
+Added: As of March 31, 2021, we had three fixed-rate mortgage loans payable with interest rates ranging from 3.67% to 5.25% per annum.
+Added: In addition, as of March 31, 2021, we had $481,400,000 outstanding under our line of credit and term loans at a weighted average interest rate of 2.08% per annum.
+Added: As of March 31, 2021, the weighted average effective interest rate on our outstanding debt, factoring in our fixed-rate interest rate swaps, was 3.35% per annum.
An increase in the variable interest rate on our variable-rate line of credit and term loans constitutes a market risk.
−Removed: As of September 30, 2020, a 0.50% increase in the market rates of interest would have increased our overall annualized interest expense on our variable-rate line of credit and term loans by $935,000, or 5.14% of total annualized interest expense on our mortgage loans payable and our line of credit and term loans.
+Added: As of March 31, 2021, a 0.50% increase in the market rates of interest would have increased our overall annualized interest expense on our variable-rate line of credit and term loans by $945,000, or 5.58% of total annualized interest expense on our mortgage loans payable and our line of credit and term loans.
See Note 6, Mortgage Loans Payable, Net, and Note 7, Line of Credit and Term Loans, to our accompanying condensed consolidated financial statements, for a further discussion.
Other Market Risk
−Removed: In addition to changes in interest rates, the value of our future investments is subject to fluctuations based on changes in local and regional economic conditions and changes in the creditworthiness of tenants, which may affect our ability to refinance our debt if necessary.
+Added: In addition to changes in interest rates, the value of our investments is subject to fluctuations based on changes in local and regional economic conditions and changes in the creditworthiness of tenants, which may affect our ability to refinance our debt if necessary.
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.