Interest rate risk We face interest rate risk when interest rates change. If we have borrowings under our Revolving Credit Facility and on our loans outstanding under our Term Loan Facility and interest rates rise, our cash flow is negatively impacted because we will be required to pay out more interest on the Revolving Credit Facility and Term Loan Facility. The uncertainty of outgoing cash flow from interest payments increases our exposure to interest rate risk. We do not actively manage this risk. Covenant risk Our Revolving Credit Facility contains a financial maintenance covenant. The covenant (which applies only when the Revolving Credit Facility is drawn at or above 35% of the Revolving Credit Facility limit) is a ratio of Total Net Funded Debt to Adjusted EBITDA (each, as defined in the Revolving Credit Facility Agreement) equal to or less than 8.00 to 1.00. We were in compliance with all covenants as of December 31, 2020. If we were to default on our covenants, our ability to borrow under our Revolving Credit Facility may be suspended which would significantly affect our liquidity. Additionally, the Notes and the Credit Agreements governing the Revolving Credit Facility and Term Loan Facility, among other restrictions and subject to certain exceptions, limit our ability and the ability of our restricted subsidiaries, to: ● declare or pay dividends or make certain payments and investments; ● incur additional indebtedness or issue disqualified stock; ● permit contractual restrictions; ● create, or permit to exist, certain liens; ● enter into certain transactions with affiliates; ● transfer and sell assets; and 138 Table of Contents ● consolidate, amalgamate or merge with another company. Subject to certain exceptions, the Notes Indentures and the Credit Agreements permit us and our restricted subsidiaries to incur additional indebtedness, including senior indebtedness and secured indebtedness and contain customary events of default. Exchange Rate Risk Our operations in the United States are conducted in U.S. dollars and our audited consolidated financial statements and interim condensed unaudited financial statements are denominated in Canadian dollars. See the notes to our audited consolidated financial statements for additional information regarding foreign currency translation and risk. The majority of the collection vehicles used in our Canadian operations are manufactured in the United States and as a result we face exchange rate risk with regards to these purchases. Changes in the USD rate of exchange may have an effect on the amount we are required to spend on capital. We do not actively manage this risk as it relates to the purchase of our collection vehicles in Canada. We also face exchange rate risk in connection with our US dollar-denominated financings. We have entered into cross-currency swap contracts to fully hedge our exposure of the servicing of the 4.250% 2025 Secured Notes, the 5.125% 2026 Secured Notes, the 8.500% 2027 Notes and the 4.000% 2028 Notes and to changes in the value of the US dollar. Our US dollar denominated Term Loan Facility is hedged in the amount of $438.8 million as of December 31, 2020. The unhedged portion of our Notes will remain subject to exchange rate risk. We intend to manage this exposure with the cash flows from our US operations. ​