14 unchanged sentences
We do not enter into derivative or interest rate transactions for speculative purposes.
−Removed: As of December 31, 2020, we have an interest rate LIBOR swap agreement with an aggregate notional value of $265.0 million, which fixes the LIBOR interest rate at 2.1485% and matures on August 24, 2022.
−Removed: This interest rate swap has been designated as a cash flow hedge and is deemed highly effective with a fair value of ($8.8) million which is included in accounts payable and accrued expenses on the consolidated balance sheet as of December 31, 2020.
−Removed: Based on our variable balances, interest expense would have increased by approximately $1.3 million for the year ended December 31, 2020, if short-term interest rates had been 1% higher.
+Added: As of December 31, 2021, we have interest rate LIBOR swap and cap agreements with an aggregate notional value of $451.3 million, which fix interest at swap rates between 1.757% to 2.500% and cap rates between 4.5% and 5.5%, and mature between August 24, 2022 and November 1, 2033.
+Added: The interest rate swaps have been designated as cash flow hedges and are deemed highly effective with a fair value of ($25.3) million which is included in accounts payable and accrued expenses on the consolidated balance sheet as of December 31, 2021.
+Added: Based on our floating rate debt balances, interest expense would have increased by approximately $1.3 million for the year ended December 31, 2021, if short-term interest rates had been 1% higher.
As of December 31, 2021, the weighted average interest rate on the $2.2 billion of fixed-rate indebtedness outstanding was 3.9% per annum, each with maturities at various dates through March 17, 2035.
4 unchanged sentences
However, due to the uncertainty of the specific actions that would be taken and their possible effects, these analyses assume no changes in our financial structure.
−Removed: In July 2017, the Financial Conduct Authority (“FCA”) that regulates LIBOR announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021.
−Removed: As a result, the Federal Reserve Board and the Federal Reserve Bank of New York organized the Alternative Reference Rates Committee ("ARRC"), which identified the Secured Overnight Financing Rate ("SOFR") as its preferred alternative rate for USD LIBOR in derivatives and other financial contracts.
−Removed: Subsequently, in November 2020, the Intercontinental Exchange (“ICE”) Benchmark Administration Limited (“IBA”), the administrator of LIBOR, announced that it would consult on its intention to cease the publication of the one-week and two-month USD LIBOR settings immediately following December 31, 2021, and the remaining USD LIBOR settings immediately following the LIBOR publication on June 30, 2023.
−Removed: We are not able to predict when LIBOR will cease to be available or when there will be sufficient liquidity in the SOFR markets.
+Added: On March 5, 2021, the Financial Conduct Authority (“FCA”) announced that USD LIBOR will no longer be published after June 30, 2023.
+Added: This announcement has several implications, including setting the spread that may be used to automatically convert contracts from LIBOR to the Secured Overnight Financing Rate ("SOFR").
+Added: Additionally, banking regulators are encouraging banks to discontinue new LIBOR debt issuances by December 31, 2021.
+Added: We anticipate that LIBOR will continue to be available at least until June 30, 2023.
Any changes adopted by the FCA or other governing bodies in the method used for determining LIBOR may result in a sudden or prolonged increase or decrease in reported LIBOR.
3 unchanged sentences
These risks arise in connection with transitioning contracts to an alternative rate, including any resulting value transfer that may occur, and are likely to vary by contract.
−Removed: The value of loans or derivative instruments tied to LIBOR, as well as interest rates on our unsecured revolving credit facility and our unsecured term loan facilities and the swap rate for our interest rate swap, may also be impacted if LIBOR is limited or discontinued.
+Added: The value of loans or derivative instruments tied to LIBOR, as well as interest rates on our unsecured revolving credit facility and our unsecured term loan facilities and the swap rate for our interest rate swaps, may also be impacted if LIBOR is limited or discontinued.
For some instruments the method of transitioning to an alternative reference rate may be challenging, especially if we cannot agree with the respective counterparty about how to make the transition.
−Removed: While we expect LIBOR to be available in substantially its current form until at least the end of 2021, it is possible that LIBOR will become unavailable prior to that point.
+Added: While we expect LIBOR to be available in substantially its current form until at least the end of June 30, 2023, it is possible that LIBOR will become unavailable prior to that point.
This could result, for example, if sufficient banks decline to make submissions to the LIBOR administrator.
2 unchanged sentences
The introduction of an alternative rate also may create additional basis risk and increased volatility as alternative rates are phased in and utilized in parallel with LIBOR.
−Removed: Adjustments to systems and mathematical models to properly process and account for alternative rates will be required, which may strain the model risk management and information technology functions and result in substantial incremental costs for the company.
+Added: Adjustments to systems and mathematical models to properly process and account for alternative rates will be required, which may strain the model risk management and information technology functions and result in substantial incremental costs for us.
Our exposures to market risk have not changed materially since December 31, 2020.
3 unchanged sentences
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.