FINANCIAL INSTRUMENTS AND OTHER FAIR VALUE DISCLOSURES

12 Months Ended

Dec. 31, 2022

FINANCIAL INSTRUMENTS AND OTHER FAIR VALUE DISCLOSURES [Abstract]

FINANCIAL INSTRUMENTS AND OTHER FAIR VALUE DISCLOSURES

14.	FINANCIAL INSTRUMENTS AND OTHER FAIR VALUE DISCLOSURES

The majority of the Company’s transactions, assets and liabilities are denominated in United States dollars, the functional currency of the Company. There is no significant risk that currency fluctuations will have a material negative effect on the value of the Company’s cash flows.

The Company categorizes its fair value estimates using a fair value hierarchy based on the inputs used to measure fair value for those assets that are recorded on the Balance Sheet at fair value. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value as follows:

Level 1.

Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.

Level 2.

Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 3.

Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The following methods and assumptions were used to estimate the fair value of each class of financial instruments and other financial assets.

The carrying value of cash and cash equivalents and marketable securities, is a reasonable estimate of fair value.

The estimated fair value for the long-term debt is considered to be approximately equal to the carrying values since it bears spreads and variable interest rates which approximate market rates.

The carrying value and estimated fair value of the Company`s financial instruments at December 31, 2022 and 2021, are as follows:

All figures in USD ‘000 Recurring:	Fair Value Hierarchy Level		2022 Fair Value			2022 Carrying Value			2021 Fair Value			2021 Carrying Value
Cash and Cash Equivalents		1		59,583			59,583			34,739			34,739
Restricted Cash		1		3,719			3,719			9,909			9,909
2019 Senior Secured Credit Facility including $30 million Accordion Loan		2		(129,189	)		(127,600	)		(223,122	)		(218,243	)
Financing of 2018-built Vessels		2		(95,950	)		(94,622	)		(104,277	)		(102,715	)
Financing of 2022 Newbuildings		2		(84,851	)		(83,815	)		-			-
Non-recurring:
Vessels* (footnote 4)		2		-			-			93,710			93,710

* Vessels measured at fair value are included as part of the Vessels and Vessel Held for Sale balances of $715.3 million and $15.0 million, respectively, in our consolidated balance sheet as of December 31, 2021, and the presentation of these vessels is related to the impairment charges recorded in 2021 and presentation of the applicable vessels at their then fair value.

- 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.

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