Company: IRDM
Filing Date: 2025-10-23
Form Type: 10-Q
Source: 0001418819-25-000009
Chunk: 97

Company: Iridium Communications Inc.
Filing Date: 2025-10-23
Form: 10-Q
Item: Part I, Item 8
Chunk 97
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 Loan:Three Months Ended September 30,Nine Months Ended September 30,2025202420252024(In thousands)(In thousands)Total interest incurred$24,955 $27,797 $73,954 $77,101 Amortization of deferred financing fees$739 $657 $2,175 $1,918 Capitalized interest$1,108 $1,272 $3,174 $3,460 At each of September 30, 2025 and December 31, 2024, accrued interest on the Term Loan was $0.3 million.

6. Derivative Financial Instruments

The Company is exposed to interest rate fluctuations related to the Term Loan. The Company has reduced its exposure to fluctuations in the cash flows associated with changes in the variable interest rate by entering into offsetting positions through the use of interest rate hedges. This will reduce the negative impact of increases in the variable rate over the term of the derivative contracts. These contracts are not used for trading or other speculative purposes. Historically, the Company has not incurred, and does not expect to incur in the future, any losses as a result of counterparty default.Interest Rate CapIn July 2021, the Company entered into an interest rate cap contract (the “Cap”), which had an effective date of December 2021. The Cap manages the Company’s exposure to interest rate movements on a portion of the Term Loan through November 2026. The Cap, as modified to date, currently provides the Company with the right to receive payment from the counterparty if one-month SOFR exceeds 1.436%. The Company pays a fixed monthly premium based on an annual rate of 0.31% for the Cap. The Cap carried a notional amount of $1.0 billion as of September 30, 2025 and December 31, 2024.The Cap, which was not affected by the expansion of the Term Loan in July 2024 and March 2024 or the repricing of the Term Loan in June 2024, is designed to mirror the terms of the Term Loan and to offset the cash flows being hedged. The Company designated the Cap as a cash flow hedge of the variability of the SOFR-based interest payments on the Term Loan. The effective portion of the Cap’s change in fair value is recorded in accumulated other comprehensive income. Any ineffective portion of the Cap’s change in fair value will be recorded in current earnings as