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We are exposed to interest rate volatility with regard to existing debt issuances.
−Removed: Our exposures include the London Inter-bank Offered Rate (“LIBOR”) and the Secured Overnight Financing Rate (“SOFR”).
−Removed: We use interest rate derivative contracts, including interest rate swaps, to mitigate the majority of the Company’s exposure from interest rate changes on existing debt and future debt issuances, thereby reducing the volatility of our financing costs and, based on current and projected market conditions, achieve a desired proportion of fixed versus floating-rate debt.
−Removed: Generally, under these interest rate swaps, we agree with a counterparty to exchange floating-rate for fixed-rate interest amounts with an agreed upon notional amount.
−Removed: The United Kingdom’s Financial Conduct Authority, which regulates LIBOR, announced in 2017 the phase out of LIBOR.
−Removed: We continue to closely monitor the phase out of LIBOR to assess any impacts to our debt and interest rate swap contracts.
−Removed: We have already taken actions to amend certain contracts to incorporate a SOFR benchmark rate, and we expect other key contracts will be amended to incorporate a SOFR benchmark rate before the LIBOR phase out is completed.
−Removed: As of December 31, 2022, our remaining contracts containing exposure to LIBOR pertain only to LIBOR tenors that will be phased out by June 30, 2023.
+Added: Our exposure is primarily tied to the Secured Overnight Financing Rate (“SOFR”).
+Added: We use interest rate derivative contracts, including interest rate swaps, to mitigate the Company’s exposure from interest rate changes on existing debt and future debt issuances, thereby reducing the volatility of our financing costs and, based on current and projected market conditions, fix a portion of variable-rate debt.
+Added: Generally, under these interest rate swaps, we agree with a counterparty to exchange variable-rate for fixed-rate interest amounts with an agreed upon notional amount.
As of December 31, 2023, we had approximately $2.2 billion of debt outstanding under our debt facilities, which bears interest determined by reference to a variable rate index.
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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.