Derivative Financial Instruments

12 Months Ended

Dec. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

In February 2023 and June 2023, UAWT and ULT entered into interest rate cap agreements with a strike rate of 3.0% and 3.25%, respectively. The agreements were entered into in relation to the warehouse credit facilities which bear floating interest rates, refer to “Note 10. Borrowings” for further information. The interest rate caps provide protection to the credit facilities against exposure to changes in cash flows to the extent the underlying interest rate on the facility exceeds the strike rate. The UAWT interest rate cap matures in April 2029 and the ULT interest rate cap matures June 2025. The interest rate cap agreements meet the definition of a derivative and are reported at fair value. Refer to “Note 6. Fair Value Measurement” for additional information.

The following table presents the notional amount as well as the fair value of interest rate caps, which is reported as part of other assets on the consolidated balance sheets. There were no material derivative financial instruments held by the Company as of December 31, 2022.


	December 31, 2023
	Notional Amount		Fair Value
Interest rate caps	$	299,578	$	5,958

The Company recognizes changes in fair value of these instruments in earnings and reports them as part of the interest expense on the consolidated statements of operations and comprehensive income (loss). The Company recognized no gains or losses on interest rate caps during the year ended December 31, 2021 and 2022. The Company recognized an immaterial amount of fair value gains, net on interest rate caps during the year ended December 31, 2023.