Caesars Entertainment, Inc. 10-Q

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates, foreign currency exchange rates and commodity prices. We are exposed to changes in interest rates primarily from long-term variable-rate debt arrangements. As of June 30, 2020, interest on borrowings under our Credit Facility was subject to fluctuation based on changes in short-term interest rates. As of June 30, 2020, our long-term variable-rate borrowings totaled $488.8 million under the Term Loan and $108.0 million was outstanding under the Revolving Credit Facility. Long-term variable-rate borrowings under the Term Loan and the Revolving Credit Facility represented approximately 22% of our long-term debt as of June 30, 2020. During the six months ended June 30, 2020, the weighted average interest rates on our variable and fixed rate debt were 3.23% and 6.56%, respectively. LIBOR is expected to be discontinued after 2021. The interest rate per annum applicable to loans under our credit facilities is, at our option, either LIBOR plus a margin or a base rate plus a margin. We intend to continue monitoring the developments with respect to the potential phasing out of LIBOR after 2021 and work with our lenders to ensure any transition away from LIBOR will have minimal impact on our financial condition, but can provide no assurances regarding the impact of the discontinuation of LIBOR. We evaluate our exposure to market risk by monitoring interest rates in the marketplace and have, on occasion, utilized derivative financial instruments to help manage this risk. We do not utilize derivative financial instruments for trading purposes. There were no material quantitative changes in our market risk exposure, or how such risks are managed, for the six months ended June 30, 2020.