Company: VSAT
Filing Date: 2025-02-10
Form Type: 10-Q
Source: 0000950170-25-016993
Chunk: 96

Company: VIASAT INC
Filing Date: 2025-02-10
Form: 10-Q
Item: Part I, Item 1
Chunk 96
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s us to invest in conservative, interest-bearing investments and because our business strategy does not rely on generating material returns from our investment portfolio, we do not expect our market risk exposure on our investment portfolio to be material. Due to the short-term nature of our investment portfolio, we do not believe an immediate 10% increase or decrease in interest rates would have a material effect on the fair market value of our portfolio. We therefore do not expect our operating results or cash flows to be materially affected by a sudden change in market interest rates.

Our primary interest rate under our variable rate Credit Facilities is the forward-looking term SOFR rate plus an applicable margin. As of December 31, 2024, the effective interest rate on our outstanding borrowings under the 2022 Term Loan Facility was 9.51%, and under the 2023 Term Loan Facility was 10.05%. As of December 31, 2024, the weighted average effective interest rate under the Inmarsat Term Loan Facilities was approximately 9.31%. As of December 31, 2024, the effective interest rate that would have been applied to any new SOFR-based borrowings under the Viasat Revolving Credit Facility was approximately 7.53%, and under the Inmarsat Revolving Credit Facility was approximately 7.08%. As of December 31, 2024, we had no outstanding borrowings under our Revolving Credit Facilities. Accordingly, assuming the outstanding balance under the 2022 Term Loan Facility, the 2023 Term Loan Facility and the Inmarsat Term Loan Facilities remained constant over a year and we continued to have no outstanding borrowings under the Revolving Credit Facilities, a 10% increase in the interest rates would increase interest incurred, prior to effects of capitalized interest but taking into account Inmarsat's interest rate cap contracts with respect to the Inmarsat Term Loan Facilities (which mature at the end of February 2025), by approximately $23.7 million over a 12-month period.

We have entered into interest rate cap contracts to hedge the variable interest rates under the Inmarsat Term Loan Facilities. The interest rate cap contracts provide protection from Compound SOFR rates over 2% and covered the total nominal amount of the Inmarsat Term Loan Facilities of $1.6 billion. As of December 31, 2024, a 100 basis point increase or decrease in interest rates would increase or decrease the carrying and fair values of the interest rate cap contract by approximately $2.