DEBT AND FINANCING ARRANGEMENTS

a) Financing Structure

The following table shows the Company’s financing structure:



	Outstanding(1)		Balance(2)
December 31, 2014
2006 Senior notes due 2016	$	500,000	$	499,690
2010 Senior notes due 2020	300,000		299,112
Swiss office building mortgage	14,157		14,157
Swiss office building credit facility	5,056		5,056
$1,000,000 Secured letter of credit facility — uncommitted	497,332		—
$150,000 Secured letter of credit facility — committed (3)	—		—
	$	1,316,545	$	818,015
December 31, 2013
2006 Senior notes due 2016	$	500,000	$	499,512
2010 Senior notes due 2020	300,000		298,987
$1,000,000 Secured letter of credit facility — uncommitted	707,915		—
$450,000 Secured letter of credit facility — committed	86,102		—
	$	1,594,017	$	798,499


(1)	Indicates utilization of commitment amount, not drawn borrowings.


(2)	Represents the principal amount borrowed, net of unamortized discount.


(3)	The commitment was reduced from $450,000 to $150,000 during 2014.

b) 2006 Senior Notes Due 2016

In 2006, Allied World Assurance Company Holdings, Ltd, a Bermuda company ("Allied World Bermuda") issued $500,000 aggregate principal amount of 7.50% Senior Notes due August 1, 2016 (the “2006 Senior Notes”), with interest payable semi-annually commencing on February 1, 2007. The 2006 Senior Notes are Allied World Bermuda’s unsecured and unsubordinated obligations and rank equally in right of payment with all existing and future unsecured and unsubordinated indebtedness. The 2006 Senior Notes can be redeemed by Allied World Bermuda prior to maturity subject to payment of a “make-whole” premium. Allied World Bermuda has no current expectations of redeeming the notes prior to maturity. The 2006 Senior Notes include covenants and events of default that are usual and customary, but do not contain any financial covenants.

c) 2010 Senior Notes Due 2020

In November 2010, Allied World Bermuda issued $300,000 aggregate principal amount of 5.50% Senior Notes due November 15, 2020 (the “2010 Senior Notes”), with interest on the notes payable semi-annually commencing on May 15, 2011. The 2010 Senior Notes are Allied World Bermuda’s unsecured and unsubordinated obligations and rank equally in right of payment with all existing and future unsecured and unsubordinated indebtedness. Allied World Bermuda may redeem the 2010 Senior Notes at any time or from time to time in whole or in part at a redemption price equal to the greater of the principal amount of the 2010 Senior Notes to be redeemed or a make-whole price, plus accrued and unpaid interest. Allied World Bermuda has no current expectations of redeeming the notes prior to maturity. The 2010 Senior Notes include covenants and events of default that are usual and customary, but do not contain any financial covenants.

d) Swiss Office Building Mortgage

In 2014, the Company entered into a 20-year mortgage commitment with a Swiss bank for the construction of a company-used office building in Zug, Switzerland. The total proceeds received in 2014 under the mortgage are $14,157 (CHF 14,000) with a fixed annual interest rate of 3.2% payable quarterly. An additional $4,044 (CHF 4,000) of proceeds from the mortgage will be drawn during the first quarter of 2015. The mortgage payments will be $303 (CHF 300) per year, plus accrued interest, for the first 19 years with the remaining balance payable at the end of the mortgage. The outstanding balance of the mortgage is included in "other long-term debt" on the consolidated balance sheets.

e) Swiss Office Building Credit Facility

In conjunction with the above mortgage commitment, the Company entered into a three year credit facility with a Swiss bank that provides up to $5,056 (CHF 5,000) for general corporate purposes, however the Company will use the proceeds from the credit facility to fund the purchase of the office building in Zug, Switzerland. The Company utilized the full commitment of the credit facility to finance the purchase of the Swiss office space. The interest rate for the credit facility is 2.5%. The outstanding balance of the credit facility is included in "other long-term debt" on the consolidated balance sheets.

f) Credit Facilities

In the normal course of its operations, the Company enters into agreements with financial institutions to obtain secured and unsecured credit facilities.

Allied World Bermuda has a collateralized amended letter of credit facility with Citibank Europe plc. that has been and will continue to be used to issue standby letters of credit. The maximum aggregate amount available under this credit facility as of December 31, 2014 and 2013 is $1,000,000 on an uncommitted basis.

On November 27, 2007, Allied World Bermuda entered into an $800,000 five-year senior credit facility (the “Credit Facility”) with a syndication of lenders. The Credit Facility consisted of a $400,000 secured letter of credit facility for the issuance of standby letters of credit (the “Secured Facility”) and a $400,000 unsecured facility for the making of revolving loans and for the issuance of standby letters of credit.

On June 7, 2012, Allied World Bermuda amended the Secured Facility. The amended $450,000 four-year secured credit facility (the “Amended Secured Credit Facility”) is primarily used for the issuance of standby letters of credit to support obligations in connection with the insurance and reinsurance business of Allied World Bermuda and its subsidiaries. A portion of the facility may also be used for revolving loans for general corporate and working capital purposes, up to a maximum of $150,000. Allied World Bermuda may request that existing lenders under the Amended Secured Credit Facility make additional commitments from time to time, up to $150,000, subject to approval by the lenders. The Amended Secured Credit Facility contains representations, warranties and covenants customary for similar bank loan facilities, including certain covenants that, among other things, require the Company to maintain a certain leverage ratio and financial strength rating.

On November 12, 2014, Allied World Bermuda gave irrevocable notice to the administrative agent under the Amended Secured Credit Facility to reduce the aggregate commitment from $450,000 to $150,000. All other material items of the Amended Secured Credit Facility remain unchanged.

g) Debt Maturities

The following table reflects the Company’s debt maturities, which includes its senior notes and other long-term debt:



	Amount
2015	$	228
2016	500,303
2017	5,359
2018	303
2019	303
2020 and thereafter	312,717
Total	$	819,213