Item 7A. Quantitative and Qualitative Disclosures About Market Risk
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Throughout 2024, we borrowed a total of $125 million pursuant to the variable rate delayed draw Term Loans available under the Credit Agreement.
As of December 31, 2024, the Company had $418.0 million of gross variable rate debt outstanding. The weighted-average interest rate was 6.42% for the Term Loans at December 31, 2024. An increase in market interest rates of 1.00% would add approximately $4.1 million to annual interest expense.
In May 2023, Shentel entered into pay fixed, receive variable interest rate swaps totaling $150.0 million of notional principal (the “Swaps”). The Swaps contain monthly payment terms that became effective in May 2024 which extend through their maturity dates in June 2026. The Swaps are designated as cash flow hedges, representing 50% of the Company’s Term Loan A-1 and A-2 outstanding debt. The Company uses the Swaps to manage its exposure to interest rate risk for a portion of its long-term variable-rate Term Loans through interest rate swaps. When the Swaps’ payments term began, Shentel effectively pays a fixed weighted-average interest rate of 2.90%, prior to interest rate margin provided under our credit facility.
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