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Item 3 — Quantitative and Qualitative Disclosures About Market Risk
Aveanna Healthcare Holdings Inc. · 10-Q · Q2 FY2026 · Period ended Jul 4, 2026
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We have exposure to changing interest rates under our Securitization Facility and the 2026 Refinancing Term Facility, both of which currently bear interest at variable rates based on SOFR. As of July 4, 2026, the total amount of outstanding variable rate debt was $1.5 billion.
As of July 4, 2026, we had multiple interest rate cap agreements with an aggregate notional amount of $1,400.0 million and cap rates of 2.96% and 4.00%, effective for $880.0 million and $520.0 million of the notional amounts, respectively. The 2027 and 2029 cap agreements have an expiration dates of February 28, 2027 and December 31, 2029, respectively. We do not enter into such arrangements for trading purposes.
Based on our outstanding indebtedness and the effect of our interest rate cap agreements at July 4, 2026, a 100 basis point increase in interest rates associated with the approximately $83.4 million of unhedged variable rate debt as of July 4, 2026 would cause interest expense to increase by approximately $2.7 million annually.
See Note 5 - Long-Term Obligations, Note 6 - Securitization Facility, and Note 8 - Derivative Financial Instruments, to the unaudited interim consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q for information on the material terms of our indebtedness and derivative financial instruments.