Quantitative and Qualitative Disclosures about Market Risk
+Added: We are exposed to economic risks from interest rates and foreign currency exchange rates.
+Added: A portion of these risks is hedged, but the risks may affect our financial statements.
+Added: Interest Rates
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.
6 unchanged sentences
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, 2021.
+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, 2022.
This information is presented to evaluate the expected cash flows and sensitivity to interest rate changes (dollars in millions):
+Added: Table of Content s
Expected Maturity Data
14 unchanged sentences
$ 13,963.8 $ 1,519.6
−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 our term loan.
−Removed: At September 30, 2021, the unamortized balance of net premiums on mortgages payable is $933,000, the unamortized balance of net original issuance premiums on notes payable is $7.2 million, and the balance of deferred financing costs on mortgages payable is $865,000, on notes payable is $51.0 million, and on the term loan is $493,000.
−Removed: (2) We base the estimated fair value of the publicly-traded fixed rate senior notes and bonds at September 30, 2021 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 mortgages and private senior notes payable at September 30, 2021 on the relevant forward interest rate curve, plus an applicable credit-adjusted spread.
−Removed: We believe that the carrying values of the commercial paper borrowings and term loan balance reasonably approximate their estimated fair values at September 30, 2021.
−Removed: The table above incorporates only those exposures that exist as of September 30, 2021.
+Added: (1) Excludes net premiums recorded on mortgages payable, net premiums recorded on notes payable and deferred financing costs on mortgages payable, notes payable, and our term loan.
+Added: At March 31, 2022, the unamortized balance of net premiums on mortgages payable is $25.0 million, the unamortized balance of net premiums on notes payable is $272.7 million, and the balance of deferred financing costs on mortgages payable is $713,000, on notes payable is $60.6 million, and on the term loan is $394,000.
+Added: (2) We base the estimated fair value of the publicly-traded fixed rate senior notes and bonds at March 31, 2022, 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, 2022, on the relevant forward interest rate curve, plus an applicable credit-adjusted spread.
+Added: We believe that the carrying values of the line of credit and commercial paper borrowings and term loan balance reasonably approximate their estimated fair values at March 31, 2022.
+Added: The table above incorporates only those exposures that exist as of March 31, 2022.
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: At September 30, 2021, our outstanding notes, bonds and mortgages payable had fixed interest rates.
−Removed: Interest on our commercial paper borrowings and term loan balance is variable.
+Added: At March 31, 2022, our outstanding notes, bonds and mortgages payable had fixed interest rates.
+Added: Interest on our credit facility and commercial paper borrowings and term loan balance is variable.
However, the variable interest rate feature on our term loan has been mitigated by an interest rate swap agreement.
−Removed: At September 30, 2021, our credit facility balance was zero;
−Removed: however, we intend to borrow funds on our credit facility in the future.
−Removed: 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.
−Removed: During 2019, we commenced foreign operations and acquired real property in the U.K., and in the three months ended September 30, 2021, we expanded our foreign operations to Spain.
−Removed: We have continued to acquire properties in the U.K.
−Removed: and Spain through September 30, 2021.
−Removed: As a result, we are subject to currency fluctuations that may, from time to time, affect our financial condition and results of operations.
−Removed: Increases or decreases in the value of Sterling and Euro relative to the U.S.
−Removed: dollar impact the amount of net income we earn from our investments in the U.K.
−Removed: We mitigate these foreign currency exposures with non-U.S.
−Removed: denominated borrowings, cross-currency swaps, currency exchange swaps, foreign currency forwards and foreign currency collars.
−Removed: As we increase our international presence through investments in properties outside the U.S., we have issued Sterling denominated notes and we may also decide to transact additional business or borrow funds in currencies other than U.S.
+Added: Based on our revolving credit facility balance of $569.6 million at March 31, 2022, a 1% change in interest rates would change our interest rate costs by $5.7 million per year.
+Added: Foreign Currency Exchange Rates
+Added: We are exposed to foreign currency exchange variability related to investments in and earnings from our foreign investments.
+Added: Foreign currency market risk is the possibility that our results of operations or financial position could be better or worse than planned because of changes in foreign currency exchange rates.
+Added: We primarily hedge our foreign currency risk by borrowing in the currencies in which we invest thereby providing a natural hedge.
+Added: We continuously evaluate and manage our foreign currency risk through the use of derivative financial instruments, including cross-currency swaps, currency exchange swaps, foreign currency collars, and foreign currency forward contracts with financial counterparties where practicable.
+Added: Such derivative instruments are viewed as risk management tools and are not used for speculative or trading purposes.
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.