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Our Amended Credit Agreement provides for revolving commitments in an aggregate principal amount of $600.0 million and an unsecured term loan facility in an aggregate principal amount of $200.0 million from a syndicate of banks and other financial institutions.
−Removed: The interest rates applicable to loans under the Revolving Facility are, at the Company’s option, equal to either a base rate plus a margin ranging from 0.10% to 0.55% per annum or LIBOR plus a margin ranging from 1.10% to 1.55% per annum based on the debt to asset value ratio of the Company and its consolidated subsidiaries (subject to decrease at the Operating Partnership’s election if the Company obtains certain specified i nvestment grade ratings on its senior long-term unsecured debt).
−Removed: The interest rates applicable to loans under the Term Loan are, at the Operating Partnership’s option, equal to either a base rate plus a margin ranging from 0.50% to 1.20% per annum or LIBOR plus a margin ranging from 1.50% to 2.20% per annum based on the debt to asset value ratio of the Company and its consolidated subsidiaries (subject to decrease at the Operating Partnership’s election if the Company obtains certain specified investment grade ratings on its senior long-term unsecured debt).
−Removed: As of September 30, 2022, we had a $200.0 million Term Loan outstanding and had $180.0 million outstanding under the Revolving Facility.
+Added: The interest rates applicable to loans under the Revolving Facility are, at the Company’s option, equal to either a base rate plus a margin ranging from 0.10% to 0.55% per annum or Adjusted Term SOFR or Adjusted Daily Simple SOFR (each as defined in the Second Amended Credit Agreement) plus a margin ranging from 1.10% to 1.55% per annum based on the debt to asset value ratio of the Company and its consolidated subsidiaries (subject to decrease at the Operating Partnership’s election if the Company obtains certain specified i nvestment grade ratings on its senior long-term unsecured debt).
+Added: The interest rates applicable to loans under the Term Loan are, at the Operating Partnership’s option, equal to either a base rate plus a margin ranging from 0.50% to 1.20% per annum or Adjusted Term SOFR or Adjusted Daily Simple SOFR plus a margin ranging from 1.50% to 2.20% per annum based on the debt to asset value ratio of the Company and its consolidated subsidiaries (subject to decrease at the Operating Partnership’s election if the Company obtains certain specified investment grade ratings on its senior long-term unsecured debt).
+Added: As of March 31, 2023, we had a $200.0 million Term Loan outstanding and had $135.0 million outstanding under the Revolving Facility.
An increase in interest rates could make the financing of any acquis ition by us more costly as well as increase the costs of our variable rate debt obligations.
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Increased inflation may also have a pronounced negative impact on the interest expense we pay in connection with our outstanding indebtedness, as these costs could increase at a rate higher than our rents.
−Removed: In addition, the Chief Executive of the U.K.
−Removed: Financial Conduct Authority (the “FCA”), which regulates LIBOR, has announced that the FCA will no longer persuade or compel banks to submit rates for the calculation of LIBOR after 2021.
−Removed: However, for U.S.
−Removed: dollar LIBOR, the relevant date was deferred to June 30, 2023 for certain tenors (including overnight and one, three, six and 12 months), at which time the LIBOR administrator will cease publication of U.S.
−Removed: dollar LIBOR.
−Removed: Despite this deferral, the LIBOR administrator has advised that no new contracts using U.S.
−Removed: dollar LIBOR should be entered into after December 31, 2021.
−Removed: These actions indicate that the continuation of U.S.
−Removed: LIBOR on the current basis cannot and will not be guaranteed after June 30, 2023.
−Removed: Moreover, it is possible that U.S.
−Removed: LIBOR will be discontinued or modified prior to June 30, 2023.
−Removed: Upon the earlier of LIBOR ceasing to exist or the maturity date of our Revolving Facility, we expect to enter into an amendment to the Amended Credit Agreement and, while we cannot predict what alternative index would be negotiated with our lenders, we expect the secured overnight financing rate (“SOFR”) to be used as the replacement for LIBOR.
−Removed: If future rates based upon SOFR or any other successor reference rate are higher or more volatile than LIBOR rates as currently determined or if our lenders have increased costs due to changes in LIBOR, we may experience potential increases in interest rates on our variable rate debt, which could adversely impact our interest expense, results of operations and cash flows.
−Removed: Based on our outstanding debt balance as of September 30, 2022 described above and the interest rates applicable to our outstanding debt at September 30, 2022, assuming a 100 basis point increase in the interest rates related to our variable rate debt, interest expense would have increased ap proximately $2.9 million fo r the nine months ended September 30, 2022.
+Added: Based on our outstanding debt balance as of March 31, 2023 described above and the interest rates applicable to our outstanding debt at March 31, 2023, assuming a 100 basis point increase in the interest rates related to our variable rate debt, interest expense would have increased ap proxim ately $0.8 million for the three months ended March 31, 2023.
We may, in the future, manage, or hedge, interest rate risks related to our borrowings by means of interest rate swap agreements.
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See “Risk Factors — Risks Related to Our Status as a REIT — Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities,” which is included in our Annual Report on Form 10-K for the year ended December 31, 2022.
−Removed: As of September 30, 2022, we had no swap agreements to hedge our interest rate risks.
+Added: As of March 31, 2023, we had no swap agreements to hedge our interest rate risks.
We also expect to manage our exposure to interest rate risk by maintaining a mix of fixed and variable rates for our indebtedness.
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.