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Significant increases in interest rates may also have an adverse impact on our earnings if we are unable to acquire single-family homes with rental rates high enough to offset the increase in interest rates on our borrowings.
−Removed: All borrowings under our revolving credit facility bear interest at LIBOR plus a margin of 1.20% until the fully extended maturity date of June 2022.
−Removed: As of December 31, 2020, the Company had no outstanding variable rate debt and therefore a hypothetical 100 basis point increase or decrease in LIBOR would have no effect on our projected annual interest expense.
+Added: All borrowings under our revolving credit facility bear interest at LIBOR plus a margin of 1.10% until the fully extended maturity date of April 2026 and are subject to a zero percent LIBOR floor.
+Added: As of December 31, 2021, the Company had $350 million of outstanding variable rate debt under its revolving credit facility.
We may incur additional variable rate debt in the future, including additional amounts that we may borrow under our revolving credit facility.
+Added: Assuming no change in the outstanding balance of our existing variable rate debt, a hypothetical 100 basis point increase or decrease in LIBOR would increase or decrease our projected annual interest expense by approximately $3.5 million or $0.4 million, respectively.
+Added: This analysis does not consider the effects of the reduced level of overall economic activity that could exist in such an environment.
+Added: Further, in the event of a change of such magnitude, we would consider taking actions to further mitigate our exposure to the change.
+Added: However, because of the uncertainty of the specific actions that would be taken and their possible effects, the sensitivity analysis assumes no changes in our capital structure.
As of December 31, 2021, the Company had approximately $3.6 billion of fixed rate debt and therefore the fair value of these instruments is affected by changes in market interest rates.
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Weighted-average interest rate 4.09 % 4.09 % 4.13 % 4.50 % 5.04 % 5.80 % 5.24 %
+Added: Treasury lock agreements are used from time to time to manage the potential change in interest rates in anticipation of the possible issuance of fixed rate debt.
+Added: We do not hold or issue these derivative contracts for trading or speculative purposes.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
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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.