Company: CLH
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0000822818-25-000007
Chunk: 327

Company: CLEAN HARBORS INC
Filing Date: 2025-02-19
Form: 10-K
Item: Item 7A
Chunk 327
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Table Of Contents 

ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In the normal course of business, we are exposed to market risks, including changes in interest rates and certain foreign currency rates, primarily relating to the Canadian dollar. 

Interest Rate Risk

Our philosophy in managing interest rate risk is to maintain a debt portfolio inclusive of both variable and fixed-rate debt so as to limit our exposure to interest rate volatility. As of December 31, 2024, before taking into account any interest rate swap agreements then in place, we held $1,464.9 million of variable rate debt under our secured senior term loans due in 2028 ("2028 Term Loans") which bear interest at the Term SOFR rate plus a margin of 1.75%. 

To hedge interest rate exposure on a portion of this outstanding variable debt, we entered into interest rate swap agreements. Under the terms of the interest rate swaps entered into in 2022 ("2022 Swaps"), which hedge the interest rate exposure on the 2028 Term Loans, as of December 31, 2024, we would receive interest based on the one-month Term SOFR index and we would pay interest at the fixed rate of 1.965% on a notional amount of $600.0 million. When combined with the 1.75% interest rate margin for Term SOFR borrowings under the 2028 Term Loans, the effective annual interest rate on such $600.0 million aggregate principal amount of the 2028 Term Loans was approximately 3.71%. The remaining balance of the 2028 Term Loans subject to interest rate risk as of December 31, 2024 was $864.9 million.

We designated our interest rate swap instruments as effective cash flow hedges at inception, and therefore the change in fair value is recorded in stockholders' equity as a component of accumulated other comprehensive loss and included in interest expense at the same time as interest expense is affected by the hedged transactions. Differences paid or received over the life of the agreements are recorded as additions to or reductions of interest expense on the underlying debt.

The following table provides information regarding our total borrowings at December 31, 2024 (in thousands):

Scheduled Maturity Dates20252026202720282029ThereafterTotalSecured senior term loans due 2028$15,102 $15,102 $15,102 $1,419