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Item 3 — Quantitative and Qualitative Disclosures About Market Risk
Parsons Corporation · 10-Q · Q2 FY2026 · Period ended Jun 30, 2026
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Interest Rate Risk
We are exposed to interest rate risks related to the Company’s Revolving Credit Facility and Term Loan.
As of June 30, 2026, there was $234.0 million outstanding under the Revolving Credit Facility. Borrowings under the Credit Facility effective June 2025 bear interest at either the Term SOFR rate plus a margin between 1.0% and 1.625% or a base rate (as defined in the Credit Agreement) plus a margin of between 0% and 0.625%. The interest rate was 5.0% for all periods presented.
As of June 30, 2026, there was $450.0 million outstanding under the Term Loan. Borrowings under the Term Loan Agreement effective June 2025 will bear interest at either an adjusted Term SOFR benchmark rate plus a margin between 0.875% and 1.500% or a base rate plus a margin of between 0% and 0.500% and will initially bear interest at the middle of this range. The rates on June 30, 2026 and December 31, 2025 were 4.9% and 4.8%, respectively.
Foreign Currency Exchange Risk
We are exposed to foreign currency exchange rate risk resulting from our operations outside of the U.S. We limit exposure to foreign currency fluctuations in most of our contracts through provisions that require client payments in currencies corresponding to the currency in which costs are incurred. As a result of this natural hedge, we generally do not need to hedge foreign currency cash flows for contract work performed.
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