v3.26.1
Derivatives
 6 Months Ended
Jun. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives

5. Derivatives

Interest Rate Swaps

The Company may enter into interest rate swap transactions from time to time to hedge fixed rate debt obligations and certain fixed rate debt investments. The Company’s interest rate swaps are all with one counterparty and are centrally cleared through a registered commodities exchange. Refer to the Consolidated Schedule of Investments for additional disclosure regarding these interest rate swaps.

Cash flows related to the Company's derivatives are included within operating activities on the Consolidated Statements of Cash Flows. The following tables present the amounts paid and received on the Company’s interest rate swap transactions, excluding upfront fees, for the three and six months ended June 30, 2026 and 2025, respectively:

 

 

 

 

 

 

 

 

For the Three Months Ended June 30, 2026

 

 

For the Six Months Ended June 30, 2026

 

 

 

Maturity Date

 

Notional Amount

 

 

Paid

 

 

Received

 

 

Net

 

 

Paid

 

 

Received

 

 

Net

 

Interest rate swap

 

3/11/2029

 

$

600,000

 

 

$

(9,427

)

 

$

9,750

 

 

$

323

 

 

$

(18,619

)

 

$

19,500

 

 

$

881

 

Interest rate swap

 

3/11/2029

 

 

150,000

 

 

 

(2,247

)

 

 

2,438

 

 

 

191

 

 

 

(4,438

)

 

 

4,875

 

 

 

437

 

Interest rate swap

 

1/15/2030

 

 

600,000

 

 

 

(9,480

)

 

 

8,625

 

 

 

(855

)

 

 

(18,723

)

 

 

17,250

 

 

 

(1,473

)

Interest rate swap

 

7/15/2030

 

 

750,000

 

 

 

(10,817

)

 

 

11,485

 

 

 

668

 

 

 

(21,490

)

 

 

22,968

 

 

 

1,478

 

Total

 

 

 

$

2,100,000

 

 

$

(31,971

)

 

$

32,298

 

 

$

327

 

 

$

(63,270

)

 

$

64,593

 

 

$

1,323

 

 

 

 

 

 

 

 

 

For the Three Months Ended June 30, 2025

 

 

For the Six Months Ended June 30, 2025

 

 

 

Maturity Date

 

Notional Amount

 

 

Paid

 

 

Received

 

 

Net

 

 

Paid

 

 

Received

 

 

Net

 

Interest rate swap

 

3/11/2029

 

$

600,000

 

 

$

(10,508

)

 

$

9,750

 

 

$

(758

)

 

$

(20,701

)

 

$

19,500

 

 

$

(1,201

)

Interest rate swap

 

3/11/2029

 

 

150,000

 

 

 

(2,517

)

 

 

2,438

 

 

 

(79

)

 

 

(4,960

)

 

 

4,875

 

 

 

(85

)

Interest rate swap

 

1/15/2030

 

 

600,000

 

 

 

(10,561

)

 

 

8,625

 

 

 

(1,936

)

 

 

(20,805

)

 

 

17,250

 

 

 

(3,555

)

Interest rate swap

 

7/15/2030

 

 

750,000

 

 

 

(12,168

)

 

 

11,484

 

 

 

(684

)

 

 

(21,568

)

 

 

20,672

 

 

 

(896

)

Total

 

 

 

$

2,100,000

 

 

$

(35,754

)

 

$

32,297

 

 

$

(3,457

)

 

$

(68,034

)

 

$

62,297

 

 

$

(5,737

)

For the three and six months ended June 30, 2026, the Company recognized $22.6 million and $39.3 million, respectively, of unrealized losses on interest rate swaps designated as hedging instruments in the Consolidated Statements of Operations. For the three and six months ended June 30, 2026, this amount was offset by a decrease of $7.6 million and $14.0 million, respectively, for a change in carrying value of the 2029 Notes, a decrease of $5.8 million and $9.7 million, respectively, for a change in carrying value of the January 2030 Notes and a decrease of $9.2 million and $15.6 million, respectively, for a change in carrying value of the July 2030 Notes.

For the three and six months ended June 30, 2025, the Company recognized $22.0 million and $56.8 million, respectively, of unrealized gains on interest rate swaps designated as hedging instruments in the Consolidated Statements of Operations. For the three and six months ended June 30, 2025, this amount was offset by $6.6 million and $16.8 million, respectively, increase in the carrying value of the 2029 Notes. For the three and six months ended June 30, 2025, this amount was offset by $7.2 million and $17.6 million, respectively, increase in the carrying value of the January 2030 Notes. For the three and six months ended June 30, 2025, this amount was offset by $8.2 million and $22.4 million, respectively, increase in the carrying value of the July 2030 Notes.

As of June 30, 2026, the swap transactions had a fair value of $(8.4) million which is netted against cash collateral of $63.7 million. Cash is pledged as collateral under the Company’s derivative agreements and is included in restricted cash as a component of cash and cash equivalents on the Company’s Consolidated Balance Sheet. As of June 30, 2026, the derivatives had a fair value of $55.2 million. As of December 31, 2025, the swap transactions had a fair value of $30.9 million, which is netted against cash collateral of $47.7 million on the Company's Consolidated Balance Sheet. Cash is pledged as collateral under the Company’s derivative agreements and is included in restricted cash as a component of cash and cash equivalents on the Company's Consolidated Balance Sheet. As of December 31, 2025, the derivatives had a fair value of $78.6 million.

The Company is required under the terms of its derivatives agreements to pledge assets as collateral to secure its obligations underlying the derivatives. The amount of collateral required varies over time based on the mark-to-market value, notional amount and remaining term of the derivatives, and may exceed the amount owed by the Company on a mark-to-market basis. Any failure by the Company to fulfill any collateral requirement (e.g., a so-called “margin call”) may result in a default. In the event of a default by a counterparty, the Company would be an unsecured creditor to the extent of any such overcollateralization.

The Company may enter into other derivative instruments and incur other exposures with the same or other counterparties in the future.