Company: CMRE-PC
Filing Date: 2025-02-20
Form Type: 20-F
Source: 0001140361-25-005199
Chunk: 34

Company: Costamare Inc.
Filing Date: 2025-02-20
Form: 20-F
Item: Item 3
Chunk 34
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 had we not entered in such derivative contracts, depending on market circumstances. As of December 31, 2024, the aggregate notional amount of interest rate swaps and interest rate caps as of such date was $805.0 million. As of December 31, 2024, our obligations under fixed rate loans, finance leases and other financing arrangements, which were under fixed interest rates amounted to $713.1 million.
 
We have also entered into forward freight agreements to establish market positions and to hedge our exposure to dry bulk freight rates. We also entered into bunker swaps to hedge our exposure to bunker prices. The settlement amounts we may have to pay (or receive) at expiration of such derivative contracts (or whilst trading such derivative contracts) may be higher (or lower) than the amount we would have to pay (or receive), had we not entered into such derivative contracts, depending on market circumstances. Furthermore, we are exposed to basis risk on our forward freight agreements and bunker swaps that have been utilized for hedging, as the derivatives indices do not exactly match vessel or bunker real market characteristics. For instance, we may charter vessels that do not match with the freight forward agreements indices specifications, or we may enter into bunker swap contracts that are priced on different ports than where the actual bunker purchases will take place. Hence, we will not be in a position to perfectly hedge our freight and bunker market risk through forward freight agreements and bunker swaps.
 
From time to time, we also enter into certain currency hedges. As of December 31, 2024, the Company was engaged in 12 Euro/U.S. dollar contracts totaling $39.6 million. Furthermore, we have entered into two cross currency swaps for a notional amount of $122.4 million to hedge the foreign exchange exposure related to an unsecured bond loan that was fully prepaid in November 2024. There is no assurance that our derivative contracts or any that we enter into in the future will provide adequate protection (when traded for hedging purposes) against adverse changes in interest rates, currency exchange rates, freight rates or bunker prices or that our counterparties will be able to perform their obligations. In addition, as a result of the implementation of new regulation of the swaps markets in the United States, the European Union and elsewhere over the next few years, the cost of interest rate and currency hedges may increase or suitable hedges may not be available.
 
While we monitor the credit risks associated with our counterparties and many of our derivative contracts are cleared through clearing