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Fair value measurements and Hedging | 6 Months Ended
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Jun. 30, 2021
Fair Value Disclosures [Abstract] |
Fair value measurements and Hedging | 12. Fair value measurements and Hedging: Fair value measurements The Company recognizes all derivative instruments as either assets or liabilities at fair value on its consolidated balance sheets in accordance with ASC Topic 815, “Derivatives and Hedging”. Interest rate swaps The Company from time to time enters into interest rate derivative contracts to manage interest costs and risks associated with changing interest rates with respect to certain of its credit facilities. Details of the Company’s interest rate swaps are discussed in Note 20 and 21(c) of the Company’s consolidated financial statements for the year ended December 31, 2020, included in the 2020 Annual Report and are supplemented by the below new activity. Following the repayment of the DNB $310,000 Facility (Note 7), the Company early terminated the then existing interest rate swap agreements with DNB Bank ASA and Skandinaviska Enskilda Banken AB originally maturing in September 2023 that were hedging the variable interest payments under the DNB $310,000 Facility, and entered into a new interest rate swap agreement with the National Bank of Greece with a notional amount of $125,000 and a fixed rate at 0.65% which is effective from June 28, 2021 to June 28, 2023. In connection with the termination of the aforementioned interest rate swaps, the Company paid an amount of $494 which is included under “Loss on debt extinguishment” in the unaudited interim condensed consolidated statement of operations. The Company’s interest rate swaps were designated and qualified as cash flow hedges. The effective portion of the unrealized gains/losses from those swaps is recorded in Other Comprehensive Income / (Loss). No portion of the cash flow hedges was ineffective during the six-month periods ended June 30, 2020 and 2021. A loss of approximately $1,385 in connection with the interest rate swaps is expected to be reclassified into earnings during the following 12-month period when realized. Freight Derivatives and Bunker Swaps During the year ended December 31, 2020 and the six-month period ended June 30, 2021, the Company entered into a certain number of freight derivatives, including freight forward agreements (“FFAs”), freight options and bunker swaps, the results of which for the six-month periods ended June 30, 2020 and 2021 and the valuation of their open positions as at December 31, 2020 and June 30, 2021 are presented in the tables below. The amounts of Gain / (Loss) on interest rate swaps, freight derivatives and bunker swaps recognized in the unaudited interim condensed consolidated statements of operations, are analyzed as follows: Fair Value Measurements and Hedging - Derivative instruments effect on statement of operations (Table)
| Six months ended June 30,
|  | 2020 |  |  | 2021
Consolidated Statement of Operations |  |  |  |  |
Interest and finance costs |  |  |  |  |
Reclassification adjustments of interest rate swap loss/(gain) transferred to Interest and finance costs from Other comprehensive income/(loss) (Note 7) |  | 492 |  |  | (998)
Total Gain/(loss) recognized | $ | 492 |  | $ | (998)
Gain/(loss) on forward freight agreements and bunker swaps, net |  |  |  |  |
Realized gain/(loss) on forward freight agreements and freight options |  | 11,635 |  |  | (39)
Realized gain/(loss) on bunker swaps |  | 7,957 |  |  | 58
Unrealized gain/(loss) on forward freight agreements and freight options |  | (12,555) |  |  | (1,560)
Unrealized gain/(loss) on bunker swaps |  | 12,495 |  |  | 4
Total Gain/(loss) recognized | $ | 19,532 |  | $ | (1,537)
The guidance for fair value measurements applies to all assets and liabilities that are being measured and reported on a fair value basis. This guidance enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The statement requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data Level 3: Unobservable inputs that are not corroborated by market data The following table summarizes the valuation of the Company’s financial instruments as of December 31, 2020 and June 30, 2021. The fair value of freight derivatives and bunker swaps was determined through Level 1 inputs of the fair value hierarchy (quoted prices from the applicable exchanges such as London Clearing House (LCH) or Singapore Exchange (SGX)), while the fair value of the interest rate swaps was determined through Level 2 inputs of the fair value hierarchy (such as interest rate curves). Fair Value Measurements and Hedging - Fair value on a recurring basis - Significant Other Observable Inputs (Table)
|  | Significant Other Observable Inputs (Level 2)
|  | December 31, 2020 | June 30, 2021
| Balance Sheet Location | (not designated as cash flow hedges) | (designated as cash flow hedges) | (not designated as cash flow hedges) | (designated as cash flow hedges)
ASSETS |  |  |  |  |
Interest rate swaps - current | Derivatives, current asset portion | $ — | $— | $ — | 335
Interest rate swaps - non-current | Derivatives, non-current asset portion | — | — | — | 3,397
Total |  | $— | — | $— | 3,732
LIABILITIES |  |  |  |  |
Interest rate swaps - current | Derivatives, current liability portion | $— | 1,727 | $— | 2,010
Interest rate swaps - non-current | Derivatives, non-current liability portion | $— | 2,265 | $— | 535
Total |  | $— | 3,992 | $— | 2,545
Fair Value Measurements and Hedging - Fair value on a recurring basis - Quoted Prices in Active Markets (Table)
|  | Quoted Prices in Active Markets for Identical Assets (Level 1)
|  | December 31, 2020 | June 30, 2021
| Balance Sheet Location | (not designated as cash flow hedges) | (designated as cash flow hedges) | (not designated as cash flow hedges) | (designated as cash flow hedges)
ASSETS |  |  |  |  |
Freight derivatives - current | Derivatives, current asset portion | $ - | - | $ - | -
Total |  | $ - | - | $ - | -
LIABILITIES |  |  |  |  |
Freight derivatives - current | Derivatives, current liability portion | $ 212 | - | $ 1,701 | -
Freight derivatives - non-current | Derivatives, non-current liability portion | - | - | $ 68 | -
Total |  | $ 212 | - | $ 1,769 | -
Certain of the Company’s financial instruments discussed above require the Company to periodically post additional collateral depending on the level of any open position under such financial instruments, which as of December 31, 2020 and June 30, 2021 amounted to $895 and $4,720, respectively, and are included within “Restricted cash, current” in the consolidated balance sheets (Note 7). The carrying values of temporary cash investments, restricted cash, accounts receivable and accounts payable approximate their fair value due to the short-term nature of these financial instruments. The fair value of long-term bank loans and financing under bareboat leases (Level 2), bearing interest at variable interest rates, approximates their recorded values as of June 30, 2021, due to the variable interest rate nature thereof. The fair value of the DSF $55,000 Facility (Note 7), measured through level 2 inputs (such as interest rate curves) is $51,464, which is $695 higher than the loan's book value of $50,769. The 2022 Notes have a fixed rate, and their estimated fair value, determined through Level 1 inputs of the fair value hierarchy (quoted price on NASDAQ under the ticker symbol SBLKZ) was $50,780 as of June 30, 2021.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=123874694&loc=d3e19207-110258 + Details
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