4 unchanged sentences
As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income.
−Removed: As of September 30, 2022, we had 11 investments with an aggregate principal balance of $308.7 million, net of obligations under participation agreements, that provide for interest income at an annual rate of LIBOR plus a spread, 10 of which are subject to a LIBOR floor.
+Added: As of March 31, 2023, we had eight investments with an aggregate principal balance of $244.7 million, net of obligations under participation agreements, that provide for interest income at an annual rate of LIBOR plus a spread, six of which are subject to a LIBOR floor.
A decrease of 100 basis points in LIBOR would decrease our annual interest income, net of interest expense on participation agreements, by approximately $2.4 million, and an increase of 100 basis points in LIBOR would increase our annual interest income, net of interest expense on participation agreements, by approximately $2.4 million.
−Removed: Additionally, we had six investments with an aggregate principal balance of $131.9 million that provide for interest income at an annual rate of SOFR plus a spread, all of which were subject to a SOFR floor.
−Removed: A decrease of 100 basis points in SOFR would decrease our annual interest income by $1.2 million, and an increase of 100 basis points would increase our annual interest income by $1.3 million.
−Removed: Additionally, as of September 30, 2022, we had $ 31.3 million of borrowings outstanding under a mortgage loan payable that bear interest at an annual rate of LIBOR plus a spread that is collateralized by an office building;
−Removed: a revolving line of credit with an outstanding balance of $ 24.1 million that bears interest at an annual rate of LIBOR plus a spread that is collateralized by $ 61.3 million of first mortgages;
+Added: Additionally, we had 16 investments with an aggregate principal balance of $316.5 million that provide for interest income at an annual rate of SOFR or Term SOFR, plus a spread, all of which were subject to a SOFR or Term SOFR floor.
+Added: A decrease of 100 basis points in SOFR or Term SOFR would decrease our annual interest income by $3.2 million, and an increase of 100 basis points in SOFR or Term SOFR would increase our annual interest income by $3.2 million.
+Added: Additionally, as of March 31, 2023, we had $29.3 million of borrowings outstanding under a mortgage loan payable that bear interest at an annual rate of Term SOFR plus a spread that is collateralized by an office building;
+Added: $32.1 million of borrowings outstanding under another mortgage loan payable that bear interest an annual rate of Term SOFR plus a spread that is collateralized by three industrial buildings, a revolving line of credit with an outstanding balance of $125.0 million that bears interest at an annual rate of Term SOFR plus a spread that is collateralized by $217.9 million of first mortgages;
a repurchase agreement with an outstanding balance of $51.1 million that bears interest at an annual rate of LIBOR or Term SOFR, as applicable, plus a spread that is collateralized by $68.1 million of first mortgages;
4 unchanged sentences
The Alternative Reference Rates Committee, a steering committee comprised of large U.S.
−Removed: institutions convened by the U.S.
+Added: financial institutions convened by the U.S.
Federal Reserve, has recommended SOFR as a more robust reference rate alternative to U.S.
3 unchanged sentences
Given that SOFR is a secured rate backed by government securities, it will be a rate that does not take into account 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 with the funding costs of financial institutions.
+Added: SOFR is therefore likely to be lower than LIBOR and is less likely to correlate with the funding costs of
+Added: financial institutions.
Whether or not SOFR attains market traction as a LIBOR replacement tool remains in question.
5 unchanged sentences
While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in benefits of lower interest rates with respect to our portfolio of investments with fixed interest rates.
−Removed: For the three and nine months ended September 30, 2022 and 2021, we did not engage in interest rate hedging activities.
+Added: For the three months ended March 31, 2023 and 2022, we did not engage in interest rate hedging activities.
Prepayment Risks
21 unchanged sentences
Our Manager also requires certain borrowers to establish a cash reserve, as a form of additional collateral, for the purpose of providing for future interest or property-related operating payments.
−Removed: The COVID-19 pandemic has significantly impacted the commercial real estate markets, causing reduced occupancy, requests from tenants for rent deferral or abatement, and delays in construction and development projects currently planned or underway.
−Removed: While the economy has improved significantly, macroeconomic trends associated with COVID-19 pandemic have persisted and could continue to persist and impair our borrowers’ ability to pay principal and interest due to us under our loan agreements.
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.