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In general, we seek to match the interest rate characteristics of our investments with the interest rate characteristics of any related financing obligations such as repurchase agreements, bank credit facilities, term loans, revolving facilities and securitizations.
−Removed: As of June 30, 2023, we had an aggregate of $3.2 billion of variable rate debt, excluding any debt subject to interest rate swap agreements and interest rate cap agreements, and therefore, we are exposed to interest rate changes in LIBOR and SOFR.
−Removed: As of June 30, 2023, an increase or decrease of 50 basis points in interest rates would result in an increase or decrease in interest expense of $16.2 million per year.
−Removed: As of June 30, 2023, we had two interest rate cap agreements outstanding, which had maturity dates ranging from July 2023 through October 2023, with an aggregate notional amount of $712.0 million and an aggregate fair value of the net
−Removed: derivative asset of $641,000.
−Removed: The fair value of these interest rate cap agreements is dependent upon existing market interest rates and spreads.
−Removed: As of June 30, 2023, an increase of 50 basis points in interest rates would result in a change of $78,000 to the fair value of the net derivative asset, resulting in a net derivative asset of $719,000.
−Removed: A decrease of 50 basis points in interest rates would result in a $76,000 change to the fair value of the net derivative asset, resulting in a net derivative asset of $565,000.
−Removed: As the information presented above includes only those exposures that existed as of June 30, 2023, it does not consider exposures or positions arising after that date.
+Added: As of September 30, 2023, we had an aggregate of $3.3 billion of variable rate debt, excluding any debt subject to interest rate swap agreements and interest rate cap agreements, and therefore, we are exposed to interest rate changes in SOFR.
+Added: As of September 30, 2023, an increase or decrease of 50 basis points in interest rates would result in an increase or decrease in interest expense of $16.6 million per year.
+Added: As of September 30, 2023, we had one interest rate cap agreement outstanding, which was set to mature in October 2023, with an aggregate notional amount of $62.0 million and an aggregate fair value of the net derivative asset of $18,000.
+Added: The fair value of this interest rate cap agreement is dependent upon existing market interest rates and spreads.
+Added: As of September 30, 2023, an increase or decrease of 50 basis points in interest rates would not result in a significant change to the fair value of the net derivative asset.
+Added: Subsequent to September 30, 2023, the interest rate cap agreement matured.
+Added: As the information presented above includes only those exposures that existed as of September 30, 2023, it does not consider exposures or positions arising after that date.
The information presented herein has limited predictive value.
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These amounts were determined by considering the impact of hypothetical interest rate changes on our borrowing costs and assume no other changes in our capital structure.
−Removed: In July 2017, the Financial Conduct Authority (“FCA”) that regulates LIBOR announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021.
+Added: In July 2017, the Financial Conduct Authority (“FCA”) that regulates LIBOR announced it intended to stop compelling banks to submit rates for the calculation of LIBOR after 2021.
As a result, the Federal Reserve Board and the Federal Reserve Bank of New York organized the Alternative Reference Rates Committee which identified SOFR as its preferred alternative to U.S.
dollar LIBOR in derivatives and other financial contracts.
−Removed: Any changes adopted by 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.
−Removed: If a contract is not transitioned to an alternative rate and LIBOR is discontinued, the impact on our contracts is likely to vary by contract.
−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: Alternative rates and other market changes related to the replacement of LIBOR, including the introduction of financial products and changes in market practices, may lead to risk modeling and valuation challenges, such as adjusting interest rate accrual calculations and building a term structure for an alternative rate.
−Removed: The introduction of an alternative rate also may create additional basis risk and increased volatility as alternative rates are phased in and utilized in parallel with LIBOR.
−Removed: As of June 30, 2023, we had an interest rate cap agreement that was indexed to LIBOR.
−Removed: Subsequent to June 30, 2023, the interest rate cap agreement matured.
−Removed: Additionally, subsequent to June 30, 2023, all outstanding variable rate debt indexed to LIBOR was transitioned to SOFR.
+Added: The ICE Benchmark Administration Limited, the administrator of LIBOR, ceased publishing most liquid U.S.
+Added: dollar LIBOR settings on June 30, 2023.
+Added: However, uncertainty about the continuing impact on certain debt securities and other financial instruments may result in interest rates and/or payments that are higher or lower than if LIBOR had remained available.
+Added: In addition, the cessation of U.S.
+Added: dollar LIBOR settings and the utilization of an alternative reference rate may create increased volatility and may adversely affect our performance.
+Added: Alternative rates and other market changes related to the replacement of LIBOR, including the introduction of financial products and changes in market practices, may lead to risk modeling and valuation challenges.
+Added: As of September 30, 2023, all outstanding variable rate debt indexed to LIBOR was transitioned to SOFR.
Concentrations of credit risk arise when a number of tenants are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations, including those to us, to be similarly affected by changes in economic conditions.
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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.