Iridium Communications Inc. 10-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk We had an outstanding aggregate balance of $1,621.1 million under the Term Loan as of December 31, 2021. Under the Term Loan, we pay interest at an annual rate equal to the London Interbank Offered Rate, or LIBOR, plus 2.5%, with a 0.75% LIBOR floor. Accordingly, we are subject to interest rate fluctuations in future periods. On July 21, 2021, we entered into an interest rate cap agreement, which took effect in December 2021, or the Cap, with a notional amount of $1.0 billion. The Cap manages our exposure to interest rate movements on a portion of our Term Loan by providing us the right to receive payment if one-month LIBOR exceeds 1.5%. A one-half percentage point increase or decrease in the LIBOR would not have a material impact on our interest expense. We have not borrowed under our Revolving Facility. Accordingly, although the Revolving Facility bears interest at LIBOR plus 3.75%, without a LIBOR floor, if and as drawn, we are not currently exposed to fluctuations in interest rates with respect to our Revolving Facility. Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, as well as accounts receivable. We maintain our cash and cash equivalents with financial institutions with high credit ratings and at times maintain the balance of our deposits in excess of federally insured limits. The majority of our cash is swept nightly into a money market fund invested in U.S. treasuries, agency mortgage backed securities and/or U.S. government guaranteed debt. Accounts receivable are due from both domestic and international customers. We perform credit evaluations of our customers’ financial condition and record reserves to provide for estimated credit losses. Accounts payable are owed to both domestic and international vendors. 52