How are The Standardx's Senior Notes classified in terms of fair value hierarchy?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
Our Senior Notes are classified as Level Two due to the use and weighting of multiple market inputs in the final price of the security. We estimated the fair value of other debt instruments using a discounted cash flow
analysis based on current market inputs for similar types of arrangements. Based on the lack of available market data, we have classified our other debt instruments and revolving credit facility, if applicable, as Level Three in the fair value hierarchy. The primary sensitivity in these models is based on the selection of appropriate discount rates. Fluctuations in our assumptions will result in different estimates of fair value.
Source: Item 1 — Financial Statements. (FDD pages 156–187)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, the company classifies its Senior Notes as Level Two in the fair value hierarchy. This classification is due to the fact that the final price of the security is determined by using and weighting multiple market inputs.
The FDD also mentions the fair value estimation of debt, which includes the Senior Notes and other long-term debt, excluding finance leases. The Senior Notes consist of several notes with varying interest rates and maturity dates, including $400 million of 4.850% senior notes due 2026, $600 million of 5.750% senior notes due 2027, and others extending to 2034.
Other debt instruments and the revolving credit facility, if applicable, are classified by The Standardx as Level Three in the fair value hierarchy because of a lack of available market data. The primary sensitivity in these models is based on the selection of appropriate discount rates, and fluctuations in these assumptions will result in different estimates of fair value.