Company: LGIH
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001580670-25-000058
Chunk: 126

Company: LGI Homes, Inc.
Filing Date: 2025-08-05
Form: 10-Q
Item: Part I, Item 8
Chunk 126
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 utilize both fixed-rate debt and variable-rate debt as part of financing our operations. We do not have the obligation to prepay our senior notes or our fixed-rate inventory related obligations prior to maturity, and, as a result, interest rate risk and changes in fair market value should not have a significant impact on our fixed-rate debt.

We currently do not hold derivatives for trading or speculative purposes, but we may do so in the future. Many of the statements contained in this section are forward looking and should be read in conjunction with our disclosures under the heading “Cautionary Statement about Forward-Looking Statements” above.

We are exposed to market risks related to fluctuations in interest rates on our outstanding variable rate indebtedness.  As of June 30, 2025, we had $662.6 million of variable rate indebtedness outstanding under the June 2025 Credit Agreement. All of the outstanding borrowings under the Credit Agreement are (and, as of June 30, 2025, all of the outstanding borrowings under the June 2025 Credit Agreement were) at variable rates based on SOFR. The interest rate for our variable rate indebtedness as of June 30, 2025 was SOFR plus 1.85%. At June 30, 2025, SOFR was 4.33%, subject to the 0.50% SOFR floor as included in the June 2025 Credit Agreement. A hypothetical 100 basis point increase in the average interest rate above the SOFR floor on our variable rate indebtedness would increase our annual interest cost by approximately $6.6 million. 

Based on the current interest rate management policies we have in place with respect to our outstanding indebtedness, we do not believe that the future interest rate risks related to our existing indebtedness will have a material adverse impact on our financial position, results of operations or liquidity.

ITEM 4.    CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, management has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of June 30, 2025. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective to ensure information is recorded, processed,