AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
−Removed: the nine months ended September 30, 2020, our cash and cash equivalents were deposited in accounts at well capitalized financial
+Added: the three months ended March 31, 2021, our cash and cash equivalents were deposited in accounts at well capitalized financial
institutions.
−Removed: The fair value of our cash and cash equivalents at September 30, 2020 approximated its carrying value.
+Added: The fair value of our cash and cash equivalents at March 31, 2021 approximated its carrying value.
and Interest Rate Risk
28 unchanged sentences
on our investment income, net of borrowing expenses.
−Removed: rates of many of our term loans to partner companies are priced using a spread over LIBOR.
−Removed: the London interbank offered rate, is the basic rate of interest used in lending between banks on the London interbank market
−Removed: and is widely used as a reference for setting the interest rate on loans globally.
−Removed: We typically use LIBOR as a reference rate
−Removed: in term loans we extend to partner companies such that the interest due to us pursuant to a term loan extended to a partner company
−Removed: is calculated using LIBOR.
−Removed: Most of our term loan agreements with partner companies contain a stated minimum value for LIBOR.
−Removed: of December 31, 2019, 100 percent of the term loans with our partner companies utilized LIBOR, including a stated minimum of LIBOR,
−Removed: as a reference rate.
−Removed: July 27, 2017, the United Kingdom’s Financial Conduct Authority, which regulates LIBOR, announced that it intends to phase
−Removed: out LIBOR by the end of 2021.
−Removed: It is unclear if at that time whether or not LIBOR will cease to exist or if new methods of calculating
−Removed: LIBOR will be established such that it continues to exist after 2021.
−Removed: Federal Reserve, in conjunction with the Alternative
−Removed: Reference Rates Committee, a steering committee comprised of large U.S.
−Removed: financial institutions, is considering replacing U.S.
−Removed: dollar LIBOR with a new index calculated by short-term repurchase agreements, backed by Treasury securities, known as the Secured
−Removed: Overnight Funding Rate (“SOFR”).
−Removed: SOFR is observed and backward looking, which stands in contrast with LIBOR under
−Removed: the current methodology, which is an estimated forward-looking rate and relies, to some degree, on the expert judgment of submitting
−Removed: panel members.
−Removed: Given that SOFR is a secured rate backed by government securities, it will be a rate that does not take into account
−Removed: bank credit risk (as is the case with LIBOR).
−Removed: SOFR is therefore likely to be lower than LIBOR and is less likely to correlate
−Removed: with the funding costs of financial institutions.
−Removed: Whether or not SOFR attains market traction as a LIBOR replacement tool remains
−Removed: As such, the future of LIBOR at this time is uncertain.
−Removed: If LIBOR ceases to exist, we may need to renegotiate the
−Removed: credit agreements with our partner companies that utilize LIBOR as a factor in determining the interest rate to replace LIBOR
−Removed: with the new standard that is established.
−Removed: Our term loans typically contain provisions to facilitate the transition to such new
−Removed: If affected credit agreements with our partner companies are unable to be renegotiated, our investments may bear interest
−Removed: at a lower rate, subject to any contractual minimum LIBOR floors, which would decrease investment income and potentially the value
−Removed: of such investments.
−Removed: In addition, any further changes or reforms to the determination or supervision of LIBOR may result in a
−Removed: sudden or prolonged increase or decrease in reported LIBOR, which could have an adverse impact on the market value for or value
−Removed: of any LIBOR-linked loans and other financial obligations or extensions of credit held by or due to us and could have a material
−Removed: adverse effect on our business, financial condition and results of operations.
−Removed: Due to the uncertainty of the replacement for LIBOR,
−Removed: the potential effect of any such event on our cost of capital and investment income cannot yet be determined.
do not believe that inflation has had a significant impact on our revenues or operations.
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.