Company: ARI
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0000950170-25-017122
Chunk: 95

Company: Apollo Commercial Real Estate Finance, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 7A
Chunk 95
---
assets subject tointerest rate sensitivity(1)

    Increase to netinterest income (2)(3)

    Increase to netinterest income(per share) (2)(3)

    Decrease to netinterest income (2)(3)

    Decrease to netinterest income(per share) (2)(3)

    USD
     
    $
    (217,959
    )
     
    $
    (321
    )
     
    $
    —

    $
    1,240

    $
    0.01

    GBP

    607,838

    3,039

    0.02

    (3,039
    )

    (0.02
    )

    EUR

    318,155

    1,591

    0.01

    (1,489
    )

    (0.01
    )

    SEK

    44,798

    224

    —

    (224
    )

    —

    Total:
     
    $
    752,832

    $
    4,533

    $
    0.03

    $
    (3,512
    )
     
    $
    (0.02
    )

(1)Excludes floating rate loans on nonaccrual

(2)Any such hypothetical impact on interest rates on our variable rate borrowings does not consider the effect of any change in overall economic activity that could occur in a rising or falling interest rate environment. Further, in the event of a change in interest rates of that magnitude, we may take actions to further mitigate our exposure to such a change. However, due to the uncertainty of the specific actions that would be taken and their possible effects, this analysis assumes no changes in our financial structure.

(3)Certain of our floating rate loans are subject to index floors. 

 57

Prepayment Risk

Prepayment risk is the risk that principal will be repaid at a different rate than anticipated, causing the return on an asset to be less than expected. In certain cases, we adapt to prepayment risk by stating prepayment penalties in loan agreements.

Market Risk

Commercial mortgage assets are subject to volatility and may be affected adversely by a number of factors, including, but not limited to, national, regional and local economic conditions (which may be adversely affected by industry slowdowns and other factors); local real estate conditions; changes or continued weakness in specific industry segments; construction quality, age and design;