PARSONS CORP 10-Q

Item 3. Quantitative and Qualitative Disclosures About Market Risk. Interest Rate Risk We are exposed to interest rate risks related to the Company’s Revolving Credit Facility. As of March 31, 2021, there were no amounts outstanding under the Revolving Credit Facility. Borrowings under the Credit Facility bear interest, at the Company’s option, at either the Base Rate (as defined in the Credit Agreement), plus an applicable margin, or LIBOR plus an applicable margin. The applicable margin for Base Rate loans is a range of 0.125% to 1.00% and the applicable margin for LIBOR loans is a range of 1.125% to 2.00%, both based on the leverage ratio of the Company at the end of each fiscal quarter. The rates at March 31, 2021 and December 31, 2020 were 1.86% and 1.87%, respectively. Foreign Currency Exchange Risk We are exposed to foreign currency exchange rate risk resulting from our operations outside of the U.S. We limit exposure to foreign currency fluctuations in most of our contracts through provisions that require client payments in currencies corresponding to the currency in which costs are incurred. As a result of this natural hedge, we generally do not need to hedge foreign currency cash flows for contract work performed.