Company: LANDO
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001495240-25-000028
Chunk: 155

Company: GLADSTONE LAND Corp
Filing Date: 2025-11-05
Form: 10-Q
Item: Part I, Item 8
Chunk 155
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ings are at fixed rates, and on a weighted-average basis, these rates are fixed at an effective interest rate (after interest patronage) of 3.39% for another 3.0 years.  As such, with respect to our current borrowings, we believe fluctuations in interest rates would have a minimal impact on our net income.  However, interest rate fluctuations may affect the fair value of our fixed-rate borrowings.  As of September 30, 2025, the fair value of our fixed-rate borrowings outstanding (excluding our Series D Term Preferred Stock) was approximately $458.5 million.

The following table summarizes the hypothetical change in fair value of our fixed-rate borrowings at September 30, 2025, if market interest rates had been one or two percentage points lower or higher than those rates in place as of September 30, 2025 (dollars in thousands):

Change in Market Interest RatesCarrying Value(1)Fair ValueDifference2% decrease$482,204 $478,055 $(4,149)1% decrease482,204 468,103 (14,101)No change482,204 458,535 (23,669)1% increase482,204 449,370 (32,834)2% increase482,204 440,547 (41,657)

(1)Includes the principal balances outstanding of all long-term borrowings (consisting of notes and bonds payable), excluding unamortized debt issuance costs.

In the future, we may be exposed to additional effects of interest rate changes, primarily as a result of additional borrowings used to maintain liquidity and fund expansion of our farmland investment portfolio and operations.  Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flows and to lower overall borrowing costs.  To achieve these objectives, we will borrow primarily at fixed rates or, in limited cases, at variable rates with the lowest margins available and, where available, with the ability to convert to fixed rates in the future.  We may also enter into derivative financial instruments, such as interest rate swaps and caps, to mitigate the interest rate risk on a related financial instrument.  We will not enter into derivative or interest rate transactions for speculative purposes.

In addition to changes in interest rates, the fair value of our farmland portfolio is subject to fluctuations based on changes in local and regional economic conditions and changes in the creditworthiness of our tenants.  Materially