XML 32 R19.htm IDEA: XBRL DOCUMENT v3.25.1
Interest Rate Derivatives
 3 Months Ended
Mar. 31, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Interest Rate Derivatives Interest Rate Derivatives
The Company has entered into various derivative agreements with financial institutions to hedge interest rate risk related to its outstanding debt. The Company had the following interest rate derivatives recorded within accrued expenses and other liabilities as of March 31, 2025 and December 31, 2024 in the Condensed Consolidated Statements of Financial Condition:
DerivativeNotional Amount
Fair Value as of March 31, 2025
Fair Value as of December 31, 2024
Fixed Rate PaidFloating Rate Received
Effective Date(3)
Maturity Date
Interest rate swap$300,000 $(5,298)$(2,291)4.37 %
1 month Term SOFR(1)
November 2022February 2028
Interest rate swap$28,500 $(669)$(397)4.47 %
1 month Term SOFR(1)
May 2024February 2028
Interest rate swap$317,000 $(2,833)$(844)4.17 %
1 month Term SOFR(1)
February 2028February 2030
____________
(1)Floating rate received subject to a 0.50% Floor.
(2)Represents the date at which the derivative is in effect and the Company is contractually required to begin payment of interest under the terms of the agreement.
A rollforward of the amounts in accumulated other comprehensive income (loss) (“AOCI”) related to interest rate derivatives designated as cash flow hedges is as follows:

Three Months Ended March 31,
20252024
Derivative gain at beginning of period$18,342 $21,806 
Amount recognized in other comprehensive income (loss)(1)
(4,797)5,901 
Amount reclassified from accumulated other comprehensive income (loss) to interest expense(1,913)(2,700)
Derivative gain at end of period11,632 25,007 
Less: gain attributable to noncontrolling interests in GCMH10,056 20,969 
Derivative gain at end of period, net$1,576 $4,038 
____________
(1)Net tax provision (benefit) of $(0.4) million and $0.3 million for the three months ended March 31, 2025 and 2024, respectively.
In October 2022, the Company terminated two derivative instruments with effective dates that started in 2021, and maturity dates in 2028. The Company received $40.3 million of cash for the fair market value of the interest rate swaps at termination in October 2022. The amounts previously recorded as hedges in AOCI will remain in AOCI and will be recorded in interest expense within the Condensed Consolidated Statements of Comprehensive Income (Loss) over the original lives of the derivative instruments.
The Company reclassified $1.9 million for each of the three months ended March 31, 2025 and 2024 from AOCI to interest expense, relating to the derivative instruments terminated that initially qualified for hedge accounting. The net impact of these reclassifications decreased interest expense for each of the three months ended March 31, 2025 and 2024.
Effective on November 1, 2022, the Company entered into a swap agreement to hedge interest rate risk related to payments made for the 2028 Term Loans that has a notional amount of $300 million and a fixed rate of 4.37%. The swap agreement and the 2028 Term Loans had a 0.50% LIBOR floor through June 30, 2023 and defaulted to Term SOFR plus a Benchmark Replacement Adjustment on July 1, 2023 at the Benchmark Transition Event as discussed in Note 11. The swap was determined to be an effective cash flow hedge at inception based on a comparison of critical terms and remained an effective cash flow hedge at and following the Benchmark Transition Event.
Effective on May 31, 2024, the Company entered into a swap agreement to hedge interest rate risk related to payments made for the increase in aggregate principal amount of the 2030 Term Loans that has a notional amount of $28.5 million and a fixed rate of 4.47%. The swap agreement and 2030 Term Loans have a 0.50% Term SOFR floor. The swap was determined to be an effective cash flow hedge at inception based on a comparison of critical terms.
On May 23, 2024, the Company entered into a forward-starting swap agreement to hedge interest rate risk related to payments made during the extended maturity of the 2030 Term Loans that has an effective date of February 2028, a notional amount of $317.0 million, and a fixed rate of 4.17%. The forward-starting swap agreement and 2030 Term Loans have a 0.50% Term SOFR floor. The swap was determined to be an effective cash flow hedge at inception based on a comparison of critical terms.
The fair values of the interest rate swaps are based on observable market inputs and represent the net amount required to terminate the positions, taking into consideration market rates and non-performance risk. Refer to Note 5 for additional information.
During the next twelve months, the Company expects to reclassify approximately $6.4 million from AOCI to interest expense, which will decrease interest expense, including the impact of the swap terminations.