Quantitative and Qualitative Disclosures about Market Risk
−Removed: We are exposed to interest rate changes primarily as a result of our credit facility and commercial paper program, term loans, mortgages payable, and long-term notes and bonds used to maintain liquidity and expand our real estate investment portfolio and operations.
+Added: We are exposed to interest rate changes primarily as a result of our credit facility and commercial paper program, term loan, mortgages payable, and long-term notes and bonds used to maintain liquidity and expand our real estate investment portfolio and operations.
Our interest rate risk management objective is to limit the impact of interest rate changes on earnings and cash flow and to lower our overall borrowing costs.
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We do not enter into any derivative transactions for speculative or trading purposes.
−Removed: The following table presents by year of expected maturity, the principal amounts, average interest rates and estimated fair values of our fixed and variable rate debt as of September 30, 2020.
+Added: The following table presents, by year of expected maturity, the principal amounts, average interest rates and estimated fair values of our fixed and variable rate debt as of March 31, 2021.
This information is presented to evaluate the expected cash flows and sensitivity to interest rate changes (dollars in millions):
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$ 8,438.9 $ 675.0
−Removed: (1) Excludes net premiums recorded on mortgages payable, net original issuance premiums recorded on notes payable and deferred financing costs on mortgages payable, notes payable, and term loans.
−Removed: At September 30, 2020, the unamortized balance of net premiums on mortgages payable is $1.9 million, the unamortized balance of net original issuance premiums on notes payable is $28.2 million, and the balance of deferred financing costs on mortgages payable is $1.1 million, on notes payable is $40.3 million, and on term loans is $692,000.
−Removed: (2) We base the estimated fair value of the publicly-traded fixed rate senior notes and bonds at September 30, 2020 on the indicative market prices and recent trading activity of our senior notes and bonds payable.
−Removed: We base the estimated fair value of our fixed rate and variable rate mortgages and private senior notes payable at September 30, 2020 on the relevant forward interest rate curve, plus an applicable credit-adjusted spread.
−Removed: We believe that the carrying value of the credit facility balance, commercial paper borrowings and term loans balance reasonably approximate their estimated fair values at September 30, 2020.
−Removed: The table above incorporates only those exposures that exist as of September 30, 2020.
+Added: (1) Excludes net premiums recorded on mortgages payable, net original issuance premiums recorded on notes payable and deferred financing costs on mortgages payable, notes payable, and our term loan.
+Added: At March 31, 2021, the unamortized balance of net premiums on mortgages payable is $1.4 million, the unamortized balance of net original issuance premiums on notes payable is $11.8 million, and the balance of deferred financing costs on mortgages payable is $907,000, on notes payable is $45.7 million, and on the term loan is $593,000.
+Added: (2) We base the estimated fair value of the publicly-traded fixed rate senior notes and bonds at March 31, 2021 on the indicative market prices and recent trading activity of our senior notes and bonds payable.
+Added: We base the estimated fair value of our fixed rate mortgages and private senior notes payable at March 31, 2021 on the relevant forward interest rate curve, plus an applicable credit-adjusted spread.
+Added: We believe that the carrying values of the commercial paper borrowings and term loan balance reasonably approximate their estimated fair values at March 31, 2021.
+Added: The table above incorporates only those exposures that exist as of March 31, 2021.
It does not consider those exposures or positions that could arise after that date.
As a result, our ultimate realized gain or loss, with respect to interest rate fluctuations, would depend on the exposures that arise during the period, our hedging strategies at the time, and interest rates.
−Removed: All of our outstanding notes and bonds have fixed interest rates.
−Removed: At September 30, 2020, all of our mortgages payable had fixed interest rates, except one variable rate mortgage on one property totaling $6.9 million, which has been swapped to a fixed interest rate.
−Removed: Interest on our revolving credit facility and term loan balance is variable.
−Removed: However, the variable interest rate feature on our term loans has been mitigated by interest rate swap agreements.
−Removed: Based on our revolving credit facility balance of $556.1 million at September 30, 2020, a 1% change in interest rates would change our interest rate costs by $5.6 million per year.
+Added: At March 31, 2021, our outstanding notes, bonds and mortgages payable had fixed interest rates.
+Added: Interest on our revolving credit facility, commercial paper borrowings and term loan balance is variable.
+Added: However, the variable interest rate feature on our term loan has been mitigated by an interest rate swap agreement.
+Added: At March 31, 2021, our credit facility balance was zero;
+Added: however, we intend to borrow funds on our credit facility in the future.
+Added: Based on a hypothetical credit facility borrowing of $50 million, a 1% change in interest rate would change our interest costs by $500,000 annually.
During 2019, we commenced foreign operations and acquired real property in the U.K.
and have continued to acquire U.K.
−Removed: properties in 2020.
+Added: properties for the three months ended March 31, 2021.
As a result, we are subject to currency fluctuations that may, from time to time, affect our financial condition and results of operations.
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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.