Note 8 — Fair Value of Financial Instruments, Derivatives and Fair Value Disclosures:

The estimated fair values of the Company’s financial instruments, other than derivatives that are not measured at fair value on a recurring basis, categorized based upon the fair value hierarchy, are as follows:


	Fair Value		Level 1		Level 2
March 31, 2020:
Cash and cash equivalents (1)	$	110,327	$	110,327	$	-
Core Term Loan Facility		(300,000)		-		(300,000)
Transition Term Loan Facility		(45,000)		-		(45,000)
Sinosure Credit Facility		(263,811)		-		(263,811)
8.5% Senior Notes		(23,970)		(23,970)		-

December 31, 2019:
Cash and cash equivalents (1)	$	150,243	$	150,243	$	-
2017 Term Loan Facility		(333,177)		-		(333,177)
ABN Term Loan Facility		(23,248)		-		(23,248)
Sinosure Credit Facility		(269,705)		-		(269,705)
8.5% Senior Notes		(26,120)		(26,120)		-
10.75% Subordinated Notes		(32,649)		-		(32,649)

⁽¹⁾

Includes non-current restricted cash of $17,029 and $60,572 at March 31, 2020 and December 31, 2019, respectively.

Derivatives

The Company uses interest rate caps, collars and swaps for the management of interest rate risk exposure associated with changes in LIBOR interest rate payments due on its credit facilities. In connection with its entry into the Core Term Loan Facility (see Note 9, “Debt”) on January 28, 2020, the Company, in a cashless transaction, converted the $350,000 notional interest rate collar into an amortizing $250,000 notional pay-fixed, receive-three-month LIBOR interest rate swap subject to a 0% floor. The term of the new hedging arrangement was extended to coincide with the maturity of the Core Term Loan Facility of January 23, 2025 at a fixed rate of 1.97%. The interest rate swap agreement has been re-designated and qualifies as a cash flow hedge and contains no leverage features. Changes in the fair value of the interest rate collar prior to the re-designation on January 28, 2020 recorded through earnings during the first quarter of 2020 totaled a loss of $1,271.

During April 2020, the Company entered into an interest rate swap agreement with a major financial institution covering a notional amount of $25,000 of the Core Term Loan Facility that effectively converts the Company’s interest rate exposure from a three-month LIBOR floating rate to a fixed rate of 0.50% through the maturity date of January 23, 2025, effective June 30, 2020. The interest rate swap agreement, which contains no leverage features, qualifies as a cash flow hedge and will be designated as such.

The Company is also party to a floating-to-fixed interest rate swap agreement with a major financial institution covering the balance outstanding under the Sinosure Credit Facility that effectively converts the Company’s interest rate exposure under the Sinosure Credit Facility from a floating rate based on three-month LIBOR to a fixed rate of 2.76% through the termination date of March 21, 2025. The interest rate swap agreement is designated and qualifies as a cash flow hedge and contains no leverage features.

Derivatives are recorded on a net basis by counterparty when a legal right of offset exists. The following table presents information with respect to the fair values of derivatives reflected in the March 31, 2020 and December 31, 2019 balance sheets on a gross basis by transaction:


	Asset Derivatives			Liability Derivatives
	Balance Sheet			Balance Sheet
	Location	Amount		Location	Amount
March 31, 2020:
Derivatives designated as hedging instruments:
Interest rate swaps:
Current portion	Current portion of derivative asset		-	Current portion of derivative liability		(7,614)
Long-term portion	Long-term derivative asset		-	Long-term derivative liability		(18,258)
Total derivatives designated as hedging instruments		$	-		$	(25,872)

December 31, 2019:
Derivatives not designated as hedging instruments:
Interest rate collar:
Current portion	Current portion of derivative asset	$	-	Current portion of derivative liability	$	(1,230)
Long-term portion	Long-term derivative asset		-	Long-term derivative liability		(577)

Derivatives designated as hedging instruments:
Interest rate swaps:
Current portion	Current portion of derivative asset		-	Current portion of derivative liability		(2,384)
Long-term portion	Long-term derivative asset		-	Long-term derivative liability		(5,968)
Total derivatives designated as hedging instruments		$	-		$	(10,159)

The following tables present information with respect to gains and losses on derivative positions reflected in the condensed consolidated statements of operations or in the condensed consolidated statements of comprehensive income.

The effect of cash flow hedging relationships recognized in other comprehensive loss excluding amounts reclassified from accumulated other comprehensive loss, including hedges of equity method investees, for the three months ended March 31, 2020 and 2019 follows:


	Three Months Ended March 31,
		2020		2019
Derivatives designated as hedging instruments:
Interest rate swaps	$	(16,121)	$	(4,091)
Interest rate cap		-		(908)
Total other comprehensive loss	$	(16,121)	$	(4,999)

The effect of cash flow hedging relationships on the condensed consolidated statement of operations is presented excluding hedges of equity method investees. The effect of the Company’s cash flow hedging relationships on the condensed consolidated statement of operations for the three months ended March 31, 2020 and 2019 follows:


	Three Months Ended March 31,
		2020		2019
Derivatives designated as hedging instruments:
Interest rate swaps	$	895	$	140
Interest rate cap		-		41

Derivatives not designated as hedging instruments:
Interest rate collar		1,352		-
Total interest expense	$	2,247	$	181

See Note 12, “Accumulated Other Comprehensive Loss,” for disclosures relating to the impact of derivative instruments on accumulated other comprehensive loss.

The following table presents the fair values, which are pre-tax, for assets and liabilities measured on a recurring basis (excluding investments in affiliated companies):


	Fair Value		Level 1		Level 2
Assets/(Liabilities) at March 31, 2020:
Derivative Assets (interest rate swaps)	$	-	$	-	$	-	(1)
Derivative Liabilities (interest rate swaps)		(25,872)		-		(25,872)	(1)

Assets/(Liabilities) at December 31, 2019:
Derivative Assets (interest rate swaps and collar)	$	-	$	-	$	-	(1)
Derivative Liabilities (interest rate swaps and collar)		(10,159)		-		(10,159)	(1)

⁽¹⁾

For interest rate caps, swaps and collars, fair values are derived using valuation models that utilize the income valuation approach. These valuation models take into account contract terms such as maturity, as well as other inputs such as interest rate yield curves and creditworthiness of the counterparty and the Company.