filings.toolsItem 7A. Quantitative and Qualitative Disclosures About Market Risk.
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Cross-currency derivative instruments are used to manage foreign exchange risk on the Sterling Notes by effectively converting £1.275 billion aggregate principal amount of fixed-rate British pound sterling denominated debt, including annual interest payments and the payment of principal at maturity, to fixed-rate U.S. dollar denominated debt. The fair value of our cross-currency derivatives included in other long-term liabilities on our consolidated balance sheets was $406 million and $504 million as of December 31, 2025 and 2024, respectively. For more information, see Note 13 to the accompanying consolidated financial statements contained in “Part II. Item 8. Financial Statements and Supplementary Data.”
As of December 31, 2025 and 2024, the weighted average interest rate on the credit facility debt was approximately 5.6% and 6.3%, respectively, and the weighted average interest rate on the senior notes was approximately 5.1% and 5.0%, respectively, resulting in a blended weighted average interest rate of 5.1% and 5.2%, respectively. The interest rate on approximately 87% and 89% of the total principal amount of our debt was fixed as of December 31, 2025 and 2024, respectively.
The table set forth below summarizes the fair values and contract terms of financial instruments subject to interest rate risk maintained by us as of December 31, 2025 (dollars in millions):
| 2026 | 2027 | 2028 | 2029 | 2030 | Thereafter | Total | Fair Value | |||||||||||||||||||||||||||||||||||||||||||
| Debt: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Fixed Rate | $ | 750 | $ | 3,250 | $ | 4,750 | $ | 7,000 | $ | 5,800 | $ | 61,118 | $ | 82,668 | $ | 73,664 | ||||||||||||||||||||||||||||||||||
| Average Interest Rate | 5.50 | % | 5.13 | % | 4.53 | % | 5.13 | % | 4.63 | % | 5.13 | % | 5.07 | % | ||||||||||||||||||||||||||||||||||||
| Variable Rate | $ | 305 | $ | 305 | $ | 642 | $ | 279 | $ | 8,068 | $ | 2,350 | $ | 11,949 | $ | 11,803 | ||||||||||||||||||||||||||||||||||
| Average Interest Rate | 4.72 | % | 4.61 | % | 4.85 | % | 4.98 | % | 5.24 | % | 6.15 | % | 5.36 | % |
Interest rates on variable-rate debt are estimated using the average implied forward Secured Overnight Financing Rate (“SOFR”) for the year of maturity based on the yield curve in effect at December 31, 2025 including applicable bank spread.
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