FOX FACTORY HOLDING CORP 10-Q

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Interest Rate Risk We are subject to the risk of fluctuating interest rates in the normal course of business. Our major market risk relates to our secured debt. Substantially all of our assets secure our revolving credit facility and term loan. The interest rates applicable to our revolving credit facility and term loans fluctuate with the Bank of America prime rate and LIBOR rates. There was no outstanding amount in borrowings under our revolving credit facility and $395.0 million outstanding on our term loans as of October 2, 2020. See Note 8 - Debt for additional information regarding our revolving credit facility and term loan. During the third quarter of fiscal year 2020, we entered into an interest rate swap contract with a fixed notional amount of $200.0 million through maturity related to the borrowings outstanding under our term debt. Through the use of the interest rate swap, we fixed the basis on which we pay interest on approximately 50% of our variable rate debt. We use derivative instruments solely to reduce the financial impact of these risks and do not use derivative instruments for speculative purposes. Refer to Note 11 – Fair Value Measurements and Financial Instruments for further details of this instrument. Aside from the above, there have been no material changes to the disclosures discussed in the section “Quantitative and Qualitative Disclosures About Market Risk” in Part II, Item 7A of our Annual Report on Form 10-K for the fiscal year ended January 3, 2020, as filed with the SEC on March 3, 2020.