Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
The Company is exposed to market risk in the form of changing interest rates on its debt. Management uses regular monitoring of market conditions and analysis techniques to manage this risk.
As of December 31, 2023, $3.5 billion of the Company’s $5.0 billion of outstanding debt bore interest at fixed rates.
The following table provides information regarding the sensitivity of certain of the Company’s financial instruments, as described above, to market conditions and changes resulting from changes in interest rates. For purposes of this analysis, sensitivity is demonstrated based on hypothetical 10% changes in the underlying market interest rates.
IMPACT ON EARNINGS AND CASH FLOW
Dollars in thousands OUTSTANDING
PRINCIPAL BALANCE
as of Dec. 31, 2023 CALCULATED
ANNUAL INTEREST ASSUMING 10%
INCREASE
in market interest rates ASSUMING 10%
DECREASE
in market interest rates
Variable Rate Debt
Unsecured Credit Facility $ — $ — $ — $ —
Unsecured Term Loan due 2024 350,000 22,372 (2,237) 2,237
Unsecured Term Loan due 2024 200,000 12,784 (1,278) 1,278
Unsecured Term Loan due 2025 300,000 19,176 (1,918) 1,918
Unsecured Term Loan due 2026 150,000 9,588 (959) 959
Unsecured Term Loan due 2027 200,000 12,784 (1,278) 1,278
Unsecured Term Loan due 2028 300,000 19,176 (1,918) 1,918
$ 1,500,000 $ 95,880 $ (9,588) $ 9,588
The Company has outstanding interest rate swaps to help mitigate its risk related to variable rate debt. As of December 31, 2023, the Company h ad $1.3 billion of interest rate swaps at a weighted average rate of 3.49% . See Note 11 to the Consolidated Financial Statements for more information regarding the Company's interest rate swaps.
FAIR VALUE
Dollars in thousands CARRYING VALUE
as of Dec. 31, 2023 2
DEC. 31, 2023 2
ASSUMING 10%
INCREASE
in market interest rates ASSUMING 10%
DECREASE
in market interest rates DEC. 31, 2022 1
Fixed Rate Debt
Senior Notes due 2025 $ 249,484 $ 244,233 $ 244,527 $ 243,909 $ 241,413
Senior Notes due 2026 579,017 581,556 582,919 580,141 570,139
Senior Notes due 2027 483,727 483,590 485,102 482,048 473,450
Senior Notes due 2028 297,429 282,200 283,207 281,170 271,058
Senior Notes due 2030 575,443 577,702 580,777 574,583 560,723
Senior Notes due 2030 296,780 249,124 250,490 247,728 236,219
Senior Notes due 2031 295,832 235,894 237,394 234,366 219,321
Senior Notes due 2031 649,521 649,347 653,508 645,118 611,392
Mortgage Notes Payable 70,534 69,058 69,157 68,959 80,913
Total Fixed Rate Debt $ 3,497,767 $ 3,372,704 $ 3,387,081 $ 3,358,022 $ 3,264,628
1 Fair values as of December 31, 2022, represent fair values of obligations that were outstanding as of that date, and do not reflect the effect of any subsequent changes in principal balances and/or additions or extinguishments of instruments.
2 Balances are presented net of discounts and debt issuance costs and including premiums. The fair value presented is based on Level 2 inputs defined as model-derived valuations in which significant inputs and significant value drivers are observable in active markets.
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