Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurement

v3.10.0.1
Fair Value Measurement
9 Months Ended
Sep. 30, 2018
Fair Value Disclosures [Abstract]  
Fair Value Measurement
Fair Value Measurement
At September 30, 2018 and December 31, 2017, the carrying value of receivables, accounts payable, accrued expenses and distributions payable to noncontrolling interests approximates fair value due to their short-term nature and falls under the Level 2 hierarchy. The carrying values and fair values of debt instruments are as follows (in thousands):
 
 
September 30, 2018
 
December 31, 2017
 
 
Carrying Value
 
Fair Value
 
Carrying Value
 
Fair Value
Bank line of credit
 
$
247,000

 
$
247,000

 
$
247,000

 
$
247,000

Senior debt
 
1,067,947

 
1,067,529

 
808,455

 
807,698

Subordinated debt
 
157,943

 
156,257

 
111,488

 
111,095

Securitization debt
 
91,708

 
89,005

 
95,821

 
96,999

SREC Loans
 

 

 
32,181

 
32,181

Total
 
$
1,564,598

 
$
1,559,791

 
$
1,294,945

 
$
1,294,973


At September 30, 2018 and December 31, 2017, the fair value of the Company’s lines of credit, and certain senior, subordinated and SREC loans approximate their carrying values because their interest rates are variable rates that approximate rates currently available to the Company. At September 30, 2018 and December 31, 2017, the fair value of the Company’s other debt instruments are based on rates currently offered for debt with similar maturities and terms. The Company’s fair value of the debt instruments fell under the Level 3 hierarchy. These valuation approaches involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market.
The Company determines the fair value of its interest rate swaps using a discounted cash flow model that incorporates an assessment of the risk of non-performance by the interest rate swap counterparty and an evaluation of the Company’s credit risk in valuing derivative instruments. The valuation model uses various inputs including contractual terms, interest rate curves, credit spreads and measures of volatility.
At September 30, 2018 and December 31, 2017, financial instruments measured at fair value on a recurring basis, based upon the fair value hierarchy are as follows (in thousands):
 
 
September 30, 2018
 
 
Level 1
 
Level 2
 
Level 3
 
Total
Derivative assets:
 
 
 
 
 
 
 
 
Interest rate swaps
 
$

 
$
27,567

 
$

 
$
27,567

Total
 
$

 
$
27,567

 
$

 
$
27,567

Derivative liabilities:
 
 
 
 
 
 
 
 
Interest rate swaps
 
$

 
$
55

 
$

 
$
55

Total
 
$

 
$
55

 
$

 
$
55


 
 
December 31, 2017
 
 
Level 1
 
Level 2
 
Level 3
 
Total
Derivative assets:
 
 
 
 
 
 
 
 
Interest rate swaps
 
$

 
$
1,917

 
$

 
$
1,917

Total
 
$

 
$
1,917

 
$

 
$
1,917

Derivative liabilities:
 
 
 
 
 
 
 
 
Interest rate swaps
 
$

 
$
8,568

 
$

 
$
8,568

Total
 
$

 
$
8,568

 
$

 
$
8,568