3. Long -term debt:

Senior secured notes

On January 26, 2011, the Company issued its 8.375% Senior Secured Notes (the “Senior Notes”) due February 15, 2018, for an aggregate principal amount of $175.0 million in a private offering for resale to qualified institutional buyers pursuant to SEC Rule 144A. The Senior Notes are secured and bear interest at 8.375% per annum. Interest is payable in cash semiannually in arrears on February 15 and August 15, of each year, beginning on August 15, 2011. The Company received net proceeds of approximately $170.5 million after deducting $4.5 million of issuance costs that are included in deposits and other assets. The Company intends to use the net proceeds from the Senior Notes for general corporate purposes and/or repurchases of its common stock or its Convertible Notes, or special or recurring dividends to its stockholders. In each of the three months ended March 31, 2013 and 2012, the Company incurred $3.8 million of interest expense related to its Senior Notes.

Convertible senior notes

In June 2007, the Company issued its Convertible Notes for an aggregate principal amount of $200.0 million in a private offering for resale to qualified institutional buyers pursuant to SEC Rule 144A. The Convertible Notes mature on June 15, 2027, are unsecured, and bear interest at 1.00% per annum. The Convertible Notes will rank equally with any future senior debt and senior to any future subordinated debt and will be effectively subordinated to all existing and future liabilities of the Company’s subsidiaries and to any secured debt the Company may issue, to the extent of the value of the collateral. Interest is payable in cash semiannually in arrears on June 15 and December 15, of each year, beginning on December 15, 2007. The Company received net proceeds from the issuance of the Convertible Notes of approximately $195.1 million, after deducting the original issue discount of 2.25% and issuance costs. The discount and other issuance costs are being amortized to interest expense using the effective interest method through June 15, 2014, which is the earliest put date. In 2008, the Company purchased an aggregate of $108.0 million of face value of the Convertible Notes for $48.6 million in cash in a series of transactions.

The debt and equity components for the Convertible Notes were as follows (in thousands):

	March 31,			December 31,
	2013			2012

Principal amount	$	91,978		$	91,978
Unamortized discount	(7,947		)	(9,494		)
Net carrying amount	84,031			82,484
Additional paid-in capital	74,933			74,933

At March 31, 2013, the unamortized discount had a remaining recognition period of approximately one year. The amount of interest expense recognized and effective interest rate were as follows (in thousands):

	Three Months Ended March 31,
	2013			2012

Contractual coupon interest	$	230		$	230
Amortization of discount and costs on Notes	1,551			1,424
Interest expense	$	1,781		$	1,654

Effective interest rate	8.7		%	8.7		%