1 unchanged sentence
Centerspace’s exposure to market risk is primarily related to fluctuations in the general level of interest rates on the current and future fixed and variable rate debt obligations.
−Removed: The Company currently uses interest rate swaps to offset the impact of interest rate fluctuations on variable-rate debt.
−Removed: During the three months ended September 30, 2021, Centerspace prepaid two variable rate term loans and terminated two of the four interest rate swaps.
−Removed: As of September 30, 2021, Centerspace has a swap with a notional of $75.0 million swap on the line of credit with an average pay rate of 2.81% and a forward swap with a notional of $70.0 million.
+Added: The Company used interest rate swaps to offset the impact of interest rate fluctuations on variable-rate debt.
+Added: During the three months ended March 31, 2022, Centerspace terminated its remaining interest rate swaps, which consisted of a swap with a notional amount of $75.0 million and a forward swap with a notional amount of $70.0 million.
The Company does not enter into derivative instruments for trading or speculative purposes.
−Removed: The interest rate swaps expose the Company to credit risk in the event of non-performance by the counterparties under the terms of the agreements.
−Removed: During the three months ended September 30, 2021, Centerspace entered into a $198.9 million Fannie Mae Credit Facility Agreement (the “FMCF”) for financing certain apartment communities.
−Removed: The FMCF is secured by mortgages on certain apartment communities.
−Removed: The notes are interest-only, have varying maturity dates of 7, 10, and 12 months, and a blended, weighted average interest rate of 2.78%.
−Removed: As of September 30, 2021, the FMCF had a balance of $198.9 million.
−Removed: In September 2021, the Company entered into a note purchase agreement for the issuance of $125.0 million of senior unsecured promissory notes.
−Removed: The following table shows the notes issued under this agreement.
−Removed: (in thousands)
−Removed: Amount Maturity Date Interest Rate
−Removed: Series 2021-A $ 35,000 September 17, 2030 2.50 %
−Removed: Series 2021-B $ 50,000 September 17, 2031 2.62 %
−Removed: Series 2021-C $ 25,000 September 17, 2032 2.68 %
−Removed: Series 2021-D $ 15,000 September 17, 2034 2.78 %
−Removed: The following table provides information about our financial instruments that are sensitive to changes in interest rates.
−Removed: For debt obligations, the table presents principal cash flows and related weighted average interest rates by expected maturity dates.
−Removed: Average variable rates are based on rates in effect at the reporting date.
−Removed: Future Principal Payments (in thousands, except percentages)
−Removed: Debt 2021 2022 2023 2024 2025 Thereafter Total Value
−Removed: Fixed Rate $ 1,362 $ 34,284 $ 45,068 $ 4,054 $ 32,850 $ 674,779 $ 792,397 $ 805,398
−Removed: Average Interest Rate (1)
−Removed: 3.98 % 3.97 % 3.88 % 3.84 % 3.84 % 3.20 %
−Removed: Variable Rate (2)
−Removed: $ — $ — $ — $ — $ 57,000 $ — $ 57,000 $ 57,000
−Removed: Average Interest Rate (1)
−Removed: — — — — 2.34 % —
−Removed: (1) Interest rate is annualized and includes the effect of interest rate swaps.
−Removed: (2) Includes our line of credit, of which $75.0 million is synthetically fixed with an interest rate swap.
See our Annual Report on Form 10-K for the year ended December 31, 2021 under the heading “Item 7A.
Quantitative and Qualitative Disclosures About Market Risk” for a more complete discussion of the Company’s interest rate sensitivity.
−Removed: As of September 30, 2021, the Company has reduced its exposure to market risk by replacing variable rate debt with fixed rate debt.
+Added: As of March 31, 2022, the Company has increased its exposure to market risk by terminating interest rate swaps which synthetically fixed the variable rate on the line of credit.
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.