Fair value of financial instruments (Tables)

9 Months Ended

Sep. 30, 2020

Schedule of Financial Liabilities Measured at Fair Value on a Recurring Basis

The following table presents our fair value hierarchy for our financial liabilities measured at fair value on a recurring basis as of September 30, 2020 and December 31, 2019 ($ in thousands):


	September 30, 2020		Level 1		Level 2		Level 3
Fair value measurements on a recurring basis
Interest rate swap	$	50,832	$	—	$	50,832	$	—


	December 31, 2019		Level 1		Level 2		Level 3
Fair value measurements on a recurring basis
Interest rate swap	$	31,932	$	—	$	31,932	$	—

Schedule of Financial Liabilities Not Measured at Fair Value

The following tables present our fair value hierarchy for our financial liabilities not measured at fair value as of September 30, 2020 and December 31, 2019 ($ in thousands):


	Carrying Value		Fair Value
	As of September 30, 2020		Level 1		Level 2		Level 3
Financial liabilities not recorded at fair value
Term Loan	$	974,103	$	—	$	—	$	893,061
Revolving Credit Facility	84,667		—		—		84,780
Term A1 Loan	33,701		—		—		35,179
Term A2 Loan	29,850		—		—		31,158
Term A3 Loan	26,962		—		—		28,055
Property Loan	101,183		—		—		110,848
Total liabilities	$	1,250,466	$	—	$	—	$	1,183,081


	Carrying Value		Fair Value
	As of December 31, 2019		Level 1		Level 2		Level 3
Financial liabilities not recorded at fair value
Term Loan	$	980,658	$	—	$	—	$	983,214
Revolving Credit Facility	60,000		—		—		60,000
Total liabilities	$	1,040,658	$	—	$	—	$	1,043,214

Summary of Valuation Techniques

The following table summarizes the valuation techniques used to estimate the fair value of our financial instruments measured at fair value on a recurring basis and our financial instruments not measured at fair value:


						Valuation Technique
Financial instruments recorded at fair value
Interest rate swaps						The fair value of the interest rate swaps is estimated based on the expected future cash flows by incorporating the notional amount of the swaps, the contractual period to maturity, and observable market-based inputs, including interest rate curves. The fair value also incorporates credit valuation adjustments to appropriately reflect nonperformance risk. The fair value of our interest rate swaps is largely dependent on forecasted LIBOR as of the measurement date. If, in subsequent periods, forecasted LIBOR exceeds 2.85% we will recognize a gain and future cash inflows. Conversely, if forecasted LIBOR falls below 2.85% in subsequent periods we will recognize a loss and future cash outflows.
Financial instruments not recorded at fair value
Term Loans and Property Loan						The fair value of our Term Loans and Property Loan are estimated using cash flow projections over the remaining contractual period by applying market forward rates and discounting back at the appropriate discount rate.
Revolving Credit Facility						The valuation technique of our Revolving Credit Facility is consistent with our Term Loans. The fair value of the Revolving Credit Facility generally approximates its carrying value as the expected term is significantly shorter in duration.