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Derivatives and Hedging Instruments (Tables)
 9 Months Ended
Sep. 30, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of Fair Value of Derivative Instruments The following table summarizes the fair value of derivative instruments as recorded in the Company’s condensed consolidated statements of financial condition (in thousands):
 September 30, 2023December 31, 2022
Balance Sheet LocationFair ValueBalance Sheet LocationFair Value
Derivatives designated as hedging instruments:
Interest rate cap contractsOther assets$20,491 Other assets$36,807 
Cross-currency swap agreementsOther liabilities(59,071)Other liabilities(36,918)
Derivatives not designated as hedging instruments:
Interest rate cap contractsOther assets3,527 
Effects of Derivatives in Cash Flow Hedging Relationships Derivatives and Hedging Instruments
The Company may periodically enter into derivative financial instruments to manage risks related to interest rates and foreign currency. Certain of the Company’s derivative financial instruments qualify for hedge accounting treatment.
The following table summarizes the fair value of derivative instruments as recorded in the Company’s condensed consolidated statements of financial condition (in thousands):
 September 30, 2023December 31, 2022
Balance Sheet LocationFair ValueBalance Sheet LocationFair Value
Derivatives designated as hedging instruments:
Interest rate cap contractsOther assets$20,491 Other assets$36,807 
Cross-currency swap agreementsOther liabilities(59,071)Other liabilities(36,918)
Derivatives not designated as hedging instruments:
Interest rate cap contractsOther assets3,527 
Derivatives Designated as Hedging Instruments
The Company uses interest rate cap contracts to manage its risk related to the interest rate fluctuations in its variable interest rate bearing debt. As of September 30, 2023, the Company held two interest rate cap contracts with a total notional amount of approximately $850.3 million. The interest rate cap hedging the fluctuations in three-month EURIBOR floating rate debt (“2019 Cap”) has a notional amount of €400.0 million (approximately $423.3 million based on an exchange rate of $1.00 to €0.94, the exchange rate as of September 30, 2023) and matures in June 2024. The interest rate cap hedging the fluctuations in sterling overnight index average (“SONIA”) bearing debt (“2021 Cap”) has a notional amount of £350.0 million (approximately $427.0 million based on an exchange rate of $1.00 to £0.82, the exchange rate as of September 30, 2023) and matures in September 2024. The 2019 Cap and 2021 Cap have been designated as cash flow hedging instruments since inception.
In September 2023, as a result of the partial repayment and amendment of the Cabot Securitisation Senior Facility (the underlying hedged item for the 2021 Cap), the Company concluded that it is probable that a certain portion of the originally forecasted hedged transactions would not occur and, as a result, partially dedesignated £100.0 million (approximately $122.0 million based on an exchange rate of $1.00 to £0.82, the exchange rate as of September 30, 2023) of the notional amount of the 2021 Cap. As a result of the partial dedesignation, the Company reclassified the existing deferred gain of approximately $3.7 million from accumulated other comprehensive loss into Other income, net in its condensed consolidated statements of income for the three and nine months ended September 30, 2023. As of September 30, 2023, £250.0 million (approximately $305.0 million based on an exchange rate of $1.00 to £0.82, the exchange rate as of September 30, 2023) of the 2021 cap remained designated as a cash flow hedge and the Company expects the hedge relationship to be highly effective.
The Company expects to reclassify approximately $19.1 million of net derivative gain from accumulated other comprehensive loss into earnings relating to the designated portion of the interest rate cap hedging instruments within the next 12 months.
The Company uses cross-currency swap agreements to manage foreign currency exchange risk by converting fixed-rate Euro-denominated borrowings and fixed-rate GBP-denominated borrowings including periodic interest payments and the payment of principal at maturity to fixed-rate USD debt. The cross-currency swap agreements are accounted for as fair value hedges.
Prior to June 2023, the Company held cross-currency swap agreements (“2020 Euro Swaps”) with a total notional amount of €350.0 million (approximately $370.4 million based on an exchange rate of $1.00 to €0.94, the exchange rate as of September 30, 2023). These cross-currency swaps were set to expire in October 2023 and were designated as cash flow hedges. In June 2023, the Company amended the cross-currency swap agreements and extended the expiration date of these agreements to October 2025 without changing the total notional amount. In connection with these transactions, the Company dedesignated the previous cash flow hedge relationships and redesignated the amended cross-currency swap agreements as fair value hedges. The amended cross-currency swap agreements are considered off-market derivatives. The unrealized loss associated with the amended cross-currency swap agreements was approximately $1.3 million as of September 30, 2023. The principal amount of the hedged liabilities relating to the 2020 Euro Swaps is equal to the notional amount of the 2020 Euro Swaps and is included in Borrowings in the Company’s condensed consolidated statements of financial condition as of September 30, 2023.
In July 2023, the Company entered into cross-currency swap agreements (“2023 GBP Swaps”) with a total notional amount of £300.0 million (approximately $366.0 million based on an exchange rate of $1.00 to £0.82, the exchange rate as of September 30, 2023) that are used to manage foreign currency exchange risk. The 2023 GBP Swaps expire in February 2026. The principal amount of the hedged liabilities relating to the 2023 GBP Swaps is equal to the notional amount of the 2023 GBP Swaps and are included in Borrowings in the Company’s condensed consolidated statements of financial condition as of September 30, 2023.
The following tables summarize the effects of derivatives designated as hedging instruments in the Company’s condensed consolidated financial statements (in thousands):
Derivatives Designated as Hedging InstrumentsGain (Loss) Recognized in OCILocation of Gain (Loss) Reclassified from OCI into Income (Loss)Gain (Loss) Reclassified from OCI into Income (Loss)
Three Months Ended September 30,Three Months Ended September 30,
2023202220232022
Interest rate cap contracts$(9,578)$23,422 Interest expense$(424)$(201)
Cross-currency swap agreements(26,811)(27,913)Interest expense(925)(2,263)
Other income (expense)(32,401)(23,630)
Derivatives Designated as Hedging InstrumentsGain (Loss) Recognized in OCILocation of Gain (Loss) Reclassified from OCI into Income (Loss)Gain (Loss) Reclassified from OCI into Income (Loss)
Nine Months Ended
September 30,		Nine Months Ended
September 30,
2023202220232022
Interest rate cap contracts$(13,079)$39,772 Interest expense$(1,265)$(554)
Cross-currency swap agreements(26,641)(56,752)Interest expense(3,828)(5,986)
Other income (expense)(25,897)(54,482)
Derivatives Not Designated as Hedging InstrumentsAs discussed above, in September 2023, the Company partially dedesignated the 2021 Cap. As of September 30, 2023, £100.0 million (approximately $122.0 million based on an exchange rate of $1.00 to £0.82, the exchange rate as of September 30, 2023) of the notional amount of the 2021 Cap is not designated as hedging instrument for accounting purposes. The gains or losses resulting from changes in fair value on the portion of the 2021 cap that is no longer designated as a hedging instrument are recognized in other income or other expenses. During the three and nine months ended September 30, 2023, the Company recorded a loss of approximately $0.2 million in connection with the changes in the fair value of the 2021 Cap not designated as a hedging instrument.