Item 7A. Quantitative and Qualitative Disclosures About Market Risk
ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The principal material financial market risk to which we are exposed is interest rate risk.
The table below presents principal, interest and related weighted average interest rates by year of maturity, with respect to debt outstanding, which consists exclusively of the Secured Term Loan on December 31, 2025 (dollars in thousands).
2026 2027 2028 2029 2030 Thereafter Total Fair Value
Secured variable rate debt
Principal $ 520,000 $ — $ — $ — $ — $ — $ 520,000 $ 520,000
Variable interest rate on debt maturities 6.0 % 6.0 %
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The Company has purchased an interest rate cap that effectively caps term SOFR with respect to the Secured Term Loan at 5.00% per annum.
We previously entered into the interest rate swap arrangements designated and qualifying as cash flow hedges to reduce our exposure to the variability in future cash flows attributable to changes in interest rates. Derivative instruments expose us to credit risk in the event of non-performance by the counterparty under the terms of the interest rate hedge agreement. We believe that we minimize our credit risk on these transactions by dealing with major, creditworthy financial institutions. As part of our ongoing control procedures, we monitor the credit ratings of counterparties and our exposure to any single entity, thus minimizing our credit risk concentration.
The following table sets forth information pertaining to interest rate swap contracts in place as of December 31, 2024 and their respective fair value (dollars in thousands). There were no interest rate swap contracts in place as of December 31, 2025:
Notional Amount Floating Index Rate Termination/ Fair Value as of:
Fixed Rate Effective Date Expiration Date December 31, 2024
$75,000 3.677% USD-SOFR July 21, 2023 January 10, 2025 $ 14
50,000 3.676% USD-SOFR July 21, 2023 January 10, 2025 9
100,000 4.719% USD-SOFR
January 10, 2025 November 12, 2025 (624)
50,000 4.720% USD-SOFR
January 10, 2025 November 12, 2025 (312)
$ (913)
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ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and supplementary data appearing on pages 45 to 80 are incorporated herein by reference.
ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
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