Company: LANDO
Filing Date: 2025-05-12
Form Type: 10-Q
Source: 0001495240-25-000012
Chunk: 135

Company: GLADSTONE LAND Corp
Filing Date: 2025-05-12
Form: 10-Q
Item: Part I, Item 8
Chunk 135
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.  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 March 31, 2025, the fair value of our fixed-rate borrowings outstanding (excluding our Series D Term Preferred Stock) was approximately $472.0 million.

The following table summarizes the hypothetical change in fair value of our fixed-rate borrowings at March 31, 2025, if market interest rates had been one or two percentage points lower or higher than those rates in place as of March 31, 2025 (dollars in thousands):

Change in Market Interest RatesCarrying Value(1)Fair ValueDifference2% decrease$500,764 $494,129 $(6,635)1% decrease500,764 482,853 (17,911)No change500,764 472,032 (28,732)1% increase500,764 461,710 (39,054)2% increase500,764 451,791 (48,973)

(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 adverse changes in the fair value of our real estate may affect our ability to refinance our debt, if necessary.

ITEM 4.CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As