Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 7A. Quantitative and Qualitative Disclosure about Market Risk
Our primary exposure to market risk results from our debt, which bears interest at both fixed and variable rates. We attempt to mitigate this risk primarily by limiting our debt exposure in total and our maturities in any one year and weighting more towards fixed-rate debt in our portfolio. We also use derivative financial instruments to effectively convert some of our variable rate debt to fixed rate debt. These fixed rate debt obligations limit the risk of fluctuating interest rates.
On April 19, 2023, we entered into a floating-to-fixed interest rate swap with respect to $200 million of the $400 million 2022 Term Loan through the maturity date of March 3, 2025. This swap fixed the underlying SOFR rate at 4.298%. On September 27, 2022, we entered into a floating-to-fixed interest rate swap with respect to the $350 million Term Loan through the maturity date of August 30, 2024. This swap fixed the underlying SOFR rate at 4.234%. As of December 31, 2023 and 2022, we had $2.1 billion and $1.9 billion, respectively, of fixed rate debt, including the Term Loan, outstanding at a weighted average interest rate of 4.50% and 4.40%, respectively.
At December 31, 2023, we had $385.1 million of variable rate debt outstanding, which consisted of the Credit Facility with $185.1 million outstanding at an interest rate of 6.31% and $200 million of the $400 million 2022 Term Loan with an interest rate of 6.46%. At December 31, 2022, we had $456.6 million of variable rate debt outstanding, which consisted of the Credit Facility with $56.6 million outstanding at an interest rate of 5.30% and the $400 million 2022 Term Loan with an interest rate of 5.45%. Based on our average variable rate debt balances in 2023, interest incurred would have increased by $3.9 million in 2023 if these interest rates had been 1% higher.
The information presented above should be read in conjunction with note 8 and note 9 of notes to consolidated financial statements included in this Annual Report on Form 10-K.
Item 8. Financial Statements and Supplementary Data
The financial statements and financial statement schedules required under Regulation S-X are filed pursuant to Item 15 of Part IV of this report.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Not applicable.
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