Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Over time, we generally seek to match the expected cash inflows from our long-term leases and loans receivable with the expected cash outflows for our long-term debt. To achieve this objective, we borrow on a fixed-rate basis through the issuance of senior unsecured notes or incur debt that bears interest at floating rates under the Revolving Credit Facility, which we use in connection with our operations, including for funding investments, the 2024 Term Loan, the 2027 Term Loan and the 2028 Term Loan.
Principal Outstanding Weighted Average Interest Rate (1)
(in thousands) Maturity Date December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021
Unsecured term loans:
2024 Term Loan April 2024 $ 200,000 $ 200,000 2.9% 3.3%
2027 Term Loan February 2027 430,000 430,000 2.4% 3.0%
2028 Term Loan January 2028 400,000 — 4.6% —%
Senior unsecured notes July 2031 400,000 400,000 3.1% 3.1%
Revolving Credit Facility February 2026 — 144,000 —% 1.3%
Total principal outstanding $ 1,430,000 $ 1,174,000 3.3% 2.9%
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(1) Interest rates are presented after giving effect to our interest rate swap and lock agreements, where applicable.
We have fixed the floating rates on borrowings under our term loan facilities by entering into interest rate swap agreements where we pay a fixed interest rate and receive a floating interest rate equal to the rate we pay on the respective loan. At December 31, 2022, our aggregate asset in the event of the early termination of our swaps was $45.9 million.
At December 31, 2022, a 100-basis point increase of the interest rate on our unsecured term loan borrowings would increase our related interest costs by $10.3 million per year and a 100-basis point decrease of the interest rate would decrease our related interest costs by $10.3 million per year.
We are exposed to interest rate risk between the time we enter into a sale-leaseback transaction, acquire a leased property or invest in a loan receivable and the time we finance the related asset with long-term fixed-rate debt. In addition, when our long-term debt matures, we may have to refinance the debt at a higher interest rate. Market interest rates are sensitive to many factors that are beyond our control. Our interest rate risk management objective is to limit the impact of future interest rate changes on our earnings and cash flows.
In addition to amounts that we borrow under the Revolving Credit Facility, we may incur variable-rate debt in the future that we do not choose to hedge. Additionally, decreases in interest rates may lead to increased competition for the acquisition of real estate due to a reduction in desirable alternative income-producing investments. Increased competition for the acquisition of real estate may lead to a decrease in the yields on real estate we have targeted for acquisition. In such circumstances, if we are not able to offset the decrease in yields by obtaining lower interest costs on our borrowings, our results of operations will be adversely affected. Significant increases in interest rates may also have an adverse impact on our earnings if we are unable to acquire real estate with rental rates high enough to offset the increase in interest rates on our borrowings.
Fair Value of Fixed-Rate Indebtedness
The estimated fair value of our fixed-rate indebtedness under our senior unsecured notes is calculated based on quoted prices in active markets for identical assets. The following table discloses fair value information related to our fixed-rate indebtedness as of December 31, 2022:
(in thousands) Carrying Value (1)
Estimated Fair Value
Senior unsecured notes $ 400,000 $ 292,120
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(1) Excludes net deferred financing costs of $4.0 million and net discount of $0.7 million.
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