2 unchanged sentences
We are exposed to changes in interest rates primarily from our floating rate borrowing arrangements.
−Removed: We use interest rate derivative instruments to manage exposure to interest rate changes.
−Removed: As of September 30, 2022 and December 31, 2021, if market rates on our outstanding borrowings under the BofA Revolver subject to a floating rate increased by 10% at maturity, or approximately 50 basis points, over the current variable rate, the increase in interest expense would decrease future earnings and cash flows by approximately $0.3 million.
−Removed: Based upon our credit rating, the interest rate on the BofA Revolver as of September 30, 2022 was SOFR plus an adjustment of 0.11448% plus 195 basis points, or 5.11% per annum.
−Removed: There was $65.0 million drawn on the BofA Revolver as of September 30, 2022.
−Removed: We do not believe that the interest rate risk on the BofA Revolver is material as of September 30, 2022.
−Removed: Although the interest rate on the BMO Term Loan are variable, the Company fixed the base LIBOR interest rate on the BMO Term Loan, by entering into interest rate swap agreements.
+Added: We have used interest rate derivative instruments to manage exposure to interest rate changes.
+Added: As of March 31, 2023 and December 31, 2022, if market rates on our outstanding borrowings under the BofA Revolver subject to a floating rate increased by 10% at maturity, or approximately 79 and 62 basis points, respectively, over the current variable rate, the increase in interest expense would decrease future earnings and cash flows by approximately $0.6 million and $0.3 million, respectively.
+Added: The interest rate on the BofA Revolver as of March 31, 2023 was SOFR plus an adjustment of 0.11448% plus 300 basis points, or 7.92% per annum and as of December 31, 2022 was SOFR plus an adjustment of 0.11448% plus 175 basis points, or 4.358% per annum.
+Added: There was $75 million and $48 million drawn on the BofA Revolver as of March 31, 2023 and December 31, 2022, respectively.
+Added: We do not believe that the interest rate risk on the BofA Revolver is material as of March 31, 2023.
+Added: Although the interest rate on the BMO Term Loan is variable, the Company fixed the base LIBOR interest rate on the BMO Term Loan by entering into interest rate swap agreements.
On February 20, 2019, the Company fixed the interest rate for the period beginning August 26, 2020 and ending January 31, 2024 on the BMO Term Loan with interest rate swap agreements (the “2019 BMO Interest Rate Swap”).
−Removed: On June 4, 2021, the Company paid approximately $0.6 million to terminate $55 million in Notional Value on the 2019 BMO Interest Rate Swap, which was scheduled to mature on November 30, 2021.
−Removed: Accordingly, based upon our credit rating, as of September 30, 2022, the interest rate on the BMO Term Loan was 4.04% per annum.
+Added: Accordingly, based upon our credit rating, as of December 31, 2022, the interest rate on the BMO Term Loan was 4.04% per annum.
The fair value of these interest rate swaps are affected by changes in market interest rates.
−Removed: We believe that we have mitigated interest rate risk with respect to the BMO Term Loan through the 2019 BMO Interest Rate Swap until January 31, 2024.
−Removed: This interest rate swap was our only derivative instrument as of September 30, 2022.
−Removed: The table below includes our derivative instrument, which is hedging variable cash flows related to interest on our BMO Term Loan as of September 30, 2022 and December 31, 2021 (in thousands):
+Added: This interest rate swap was our only derivative instrument as of December 31, 2022.
+Added: On February 8, 2023, we terminated all outstanding interest rate swaps applicable to the BMO Term Loan and, on February 10, 2023, we received an aggregate of approximately $4.3 million as a result of such terminations, of which approximately $0.1 million related to interest receivable.
+Added: As of March 31, 2023, if market rates on our outstanding borrowings under the BMO Term Loan subject to a floating rate increased by 10% at maturity, or approximately 79 basis points over the current variable rate, the increase in interest expense would decrease future earnings and cash flows by approximately $1.0 million.
+Added: The interest rate on the BMO Term Loan as of March 31, 2023 was SOFR plus an adjustment of 0.11448% plus 300 basis points, or 7.92% per annum.
+Added: The table below includes our derivative instrument, which hedged variable cash flows related to interest on our BMO Term Loan as of December 31, 2022 (in thousands):
Fair Value (1) at
(in thousands)
−Removed: September 30, 2022
+Added: March 31, 2023
December 31, 2022
2019 BMO Interest Rate Swap
−Removed: (1) The Notional Value decreased to $165 million on June 4, 2021.
(1) Classified within Level 2 of the fair value hierarchy.
−Removed: Our BMO Term Loan hedging transaction uses derivative instruments that involve certain additional risks such as counterparty credit risk, the enforceability of hedging contracts and the risk that unanticipated and significant changes in interest rates will cause a significant loss of basis in the contract.
+Added: Our BMO Term Loan hedging transaction used derivative instruments that involved certain additional risks such as counterparty credit risk, the enforceability of hedging contracts and the risk that unanticipated and significant changes in interest rates would cause a significant loss of basis in the contract.
We require our derivatives contracts to be with counterparties that have investment grade ratings.
−Removed: As a result, we do not anticipate that any counterparty will fail to meet its obligations.
−Removed: However, there can be no assurance that we will be able to adequately protect against the foregoing risks or that we will ultimately realize an economic benefit that exceeds the related amounts incurred in connection with engaging in such hedging strategies.
−Removed: The Company’s derivatives are recorded at fair value in other assets and liabilities in the consolidated balance sheets, the effective portion of the derivatives’ fair value is recorded to other comprehensive income in the consolidated statements of other comprehensive income (loss).
−Removed: The following table presents, as of September 30, 2022, our contractual variable rate borrowings under our BofA Revolver, which matures on January 12, 2024, under our BMO Term Loan Tranche B, which matures on January 31, 2024, under our Series A Notes, which mature on December 20, 2024, and under our Series B Notes, which mature on December 20, 2027.
+Added: As a result, we did not anticipate that any counterparty would fail to meet its obligations.
+Added: However, there was no assurance that we would be able to adequately protect against the foregoing risks or that we would ultimately realize an economic benefit that exceeds the related amounts incurred in connection with engaging in such hedging strategies.
+Added: The Company’s derivatives were recorded at fair value in other assets and liabilities in the consolidated balance sheets, the effective portion of the derivatives’ fair value were recorded to other comprehensive income in the consolidated statements of other comprehensive income (loss).
+Added: The following table presents, as of March 31, 2023, our contractual variable rate borrowings under our BofA Revolver, which matures on October 1, 2024, under our BMO Term Loan Tranche B, which matures on October 1, 2024, under our Series A Notes, which mature on December 20, 2024, and under our Series B Notes, which mature on December 20, 2027.
Payment due by period
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.