Note 6—Debt

The table below provides information about the carrying values and weighted-average effective interest rates of the Company’s debt obligations that were outstanding at March 31, 2019 and December 31, 2018:


	At				At
	March 31, 2019				December 31, 2018
			Wtd. Avg.				Wtd. Avg.
			Effective				Effective
	Carrying		Interest		Carrying		Interest
(dollars in thousands)	Value		Rate		Value		Rate
Asset Related Debt
Notes Payable and Other Debt
Bond related debt (1)
Due within one year	$	223	2.9	%	$	317	4.0	%
Due after one year		31,414	2.9			38,938	3.7
Non-bond related debt
Due within one year		1,500	5.0			1,500	5.0
Due after one year		3,000	5.0			3,500	5.0

Total asset related debt		36,137	3.2			44,255	3.9

Other Debt
Subordinated debt (2)
Due within one year		2,218	3.9			2,232	3.7
Due after one year		94,945	3.9			95,490	3.7
Notes payable and other debt (3)
Due within one year		─	─			─	─
Due after one year		6,939	14.8			7,210	14.7

Total other debt		104,102	4.6			104,932	4.5

Total debt	$	140,239	4.2		$	149,187	4.3

⁽¹⁾

Included in notes payable and other debt – bond related debt were unamortized debt issuance costs. The balance at March 31, 2019 and December 31, 2018 was de minimis.

⁽²⁾

The subordinated debt balances include net cost basis adjustments of $7.8 million and $7.9 million at March 31, 2019 and December 31, 2018, respectively, that pertain to premiums and debt issuance costs.

⁽³⁾

Included in notes payable and other debt – other debt were unamortized debt issue costs of $0.2 million at March 31, 2019 and December 31, 2018.

Covenant Compliance and Debt Maturities

The following table provides information about scheduled principal payments associated with the Company’s debt agreements that were outstanding at March 31, 2019:


	Asset Related Debt
(in thousands)	and Other Debt
2019	$	2,506
2020		28,932
2021		14,008
2022		1,879
2023		1,846
Thereafter		83,510
Net premium and debt issue costs		7,558
Total debt	$	140,239

At March 31, 2019, the Company was in compliance with all covenants under its debt obligations.

Asset Related Debt

Asset related debt is debt that finances interest-bearing assets. The interest expense associated with this debt is included within “Net interest income” on the Consolidated Statements of Operations.

Bond Related Debt

These debt obligations pertain to investments in bonds that are classified as available-for-sale and were recognized by the Company in connection with transfers of bond investments that did not qualify as sales for reporting purposes. In most of these cases, debt obligations are recognized when the Company sold bond investments for cash consideration and concurrently executed total return swap (“TRS”) agreements with the buyer, which enabled the Company to retain the economic risks and returns of such investments.

In cases where a TRS agreement was involved in a conveyance that was not accounted for as a sale, and as of March 31, 2019, the Company’s counterparty is required to pay the Company an amount equal to the interest payments received on the underlying bonds and the Company is required to pay the counterparty a rate that is based upon the Securities Industry and Financial Markets Association seven-day municipal swap rate (“SIFMA”) plus a spread. The Company uses the pay rate on executed TRS agreements to accrue interest on its secured borrowing obligations to its counterparty. At March 31, 2019, the weighted-average effective interest rates on these debt obligations was 2.9%.

At March 31, 2019, the maturity dates of bond related debt obligations that were recognized in transfers that involved TRS agreements were July 8, 2020 and June 21, 2021.

Non-bond Related Debt

This debt obligation bears interest at 5.0%, is payable quarterly in arrears and has a varying amortization schedule that fully amortizes the note by its maturity date of January 1, 2026. The UPB and carrying value of this debt obligation was $4.5 million at March 31, 2019.

Other Debt

Other debt of the Company finances non-interest-bearing assets and other business activities of the Company. The interest expense associated with this debt is classified as “Interest expense” under “Other expenses” on the Consolidated Statements of Operations.

Subordinated Debt

The table below provides information about the key terms of the subordinated debt that was issued by MMA Financial Holdings, Inc. (“MFH”), the Company’s wholly owned subsidiary, and that was outstanding at March 31, 2019:


(dollars in thousands)			Net Premium				Interim
			and Debt				Principal
Issuer	Principal		Issuance Costs		Carrying Value		Payments	Maturity Date	Coupon
MFH	$	26,393	$	2,369	$	28,762	Amortizing	March 30, 2035	3-month LIBOR plus 2.0%
MFH		23,999		2,165		26,164	Amortizing	April 30, 2035	3-month LIBOR plus 2.0%
MFH		13,834		1,153		14,987	Amortizing	July 30, 2035	3-month LIBOR plus 2.0%
MFH		25,153		2,097		27,250	Amortizing	July 30, 2035	3-month LIBOR plus 2.0%
Total	$	89,379	$	7,784	$	97,163

Notes Payable and Other Debt

At March 31, 2019, the UPB and carrying value of notes payable and other debt that was used to finance the Company’s 11.85% ownership interest in SAWHF was $7.1 million and $6.9 million, respectively. Such debt, which is denominated in South African rand, has a contractual maturity date of September 8, 2020, and requires the Company to pay its counterparty a rate that is based upon the Johannesburg Interbank Agreed Rate (“JIBAR”) plus a fixed spread of 5.15%. At March 31, 2019, the JIBAR base rate was 7.15%, while the weighted-average effective interest rate of the Company’s debt obligation that was used to finance its ownership in SAWHF was 14.8%.

Letters of Credit

The Company had no letters of credit outstanding at March 31, 2019 and December 31, 2018.