COMMITMENTS AND CONTINGENCIES

Letters of Credit and Trusts

At December 31, 2017, the Company had the following letter of credit facilities, which automatically renew each year unless terminated by either party in accordance with the applicable required notice period:



	Facility		Termination Date	Notice period required for termination
	($ in thousands)
Butterfield Bank (Cayman) Limited	100,000		June 30, 2018	90 days prior to termination date
Citibank Europe plc	400,000		October 11, 2018	120 days prior to termination date
JP Morgan Chase Bank N.A.	100,000		January 27, 2018	120 days prior to termination date
	$	600,000

On September 26, 2017, the Company provided a notice of cancellation to JP Morgan Chase Bank N.A. to terminate the letter of credit facility of $100.0 million effective on January 27, 2018. As of December 31, 2017, an aggregate amount of $188.5 million (2016: $255.4 million) in letters of credit were issued under the above facilities. Under the facilities, the Company provides collateral that may consist of equity securities, restricted cash and cash and cash equivalents. As of December 31, 2017, total equity securities, restricted cash, and cash and cash equivalents with a fair value in the aggregate of $200.4 million (2016: $310.9 million) were pledged as collateral against the letters of credit issued (also see Note 4). Each of the facilities contain customary events of default and restrictive covenants, including but not limited to, limitations on liens on collateral, transactions with affiliates, mergers and sales of assets, as well as solvency and maintenance of certain minimum pledged equity requirements, and restricts issuance of any debt without the consent of the letter of credit provider. Additionally, if an event of default exists, as defined in the letter of credit facilities, Greenlight Re will be prohibited from paying dividends to its parent company. The Company was in compliance with all the covenants of each of these facilities as of December 31, 2017 and 2016.

In addition to the letters of credit, the Company has established regulatory trust arrangements for certain cedents. As of December 31, 2017, collateral of $377.9 million (2016: $86.4 million) was provided to cedents in the form of regulatory trust accounts.

Revolving Credit Facility

During the year ended December 31, 2017, the Company entered into a secured revolving credit facility with The Bank of Nova Scotia (the “credit facility”), to provide funding for its investment activities. At December 31, 2017, the Company had the ability to borrow $50.0 million (the “commitment”) under the credit facility and had borrowed $25.0 million at an interest rate of 2.47%. The Company had pledged $37.7 million of its physical gold holdings as collateral against the borrowed funds. For the year ended December 31, 2017, interest expense pursuant to the credit facility was $0.01 million and was included in net investment income (loss) in the consolidated statements of income. The credit facility matures on November 8, 2018 and can be extended for one year by the Company upon providing 120 days’ notice to the lender. The Company may terminate or reduce the commitment by giving 10-days’ notice prior to the effective date of termination or reduction and prepaying the applicable principal obligation and all interest accrued thereon. The credit facility contains customary events of default and restrictive covenants, including but not limited to, limitations on liens on collateral, transactions with affiliates, mergers and sales of assets and restricts issuance of any debt without the consent of the credit facility provider. The Company was in compliance with all the covenants of each of these facilities as of December 31, 2017.

Operating Lease Obligations

Greenlight Re has entered into lease agreements for office space in the Cayman Islands. Under the terms of the lease agreements, Greenlight Re is committed to annual rent payments ranging from $0.3 million at inception to $0.5 million at lease termination. The leases expire on June 30, 2018 and Greenlight Re has the option to renew the leases for a further five year term. Included in the schedule below are the minimum lease payment obligations relating to these leases as of December 31, 2017.

GRIL has entered into a lease agreement for office space in Dublin, Ireland. Under the terms of this lease agreement, GRIL is committed to minimum annual rent payments denominated in Euros approximating €0.1 million until May 2021, and adjusted to the prevailing market rates for each of the two subsequent five-year terms. GRIL has the option to terminate the lease agreement in 2021. Included in the schedule below are the net minimum lease payment obligations relating to this lease as of December 31, 2017.

The total rent expense related to leased office space for the year ended December 31, 2017 was $0.6 million, (2016: $0.6 million, 2015: $0.5 million).

Private Equity and Limited Partnerships

From time to time, the Company makes investments in private equity vehicles. As part of the Company’s participation in such private equity investments, the Company may make funding commitments. As of December 31, 2017, the Company had commitments to invest an additional $6.5 million (2016: $9.2 million) in private equity investments. Included in the schedule below are the minimum payment obligations relating to these investments as of December 31, 2017.

Schedule of Commitments and Contingencies

The following is a schedule of future minimum payments required under the above commitments:



	2018		2019		2020		2021		2022		Thereafter		Total
	($ in thousands)
Operating lease obligations	$	388	$	155	$	155	$	58	$	—	$	—	$	756
Private equity and limited partnerships ⁽¹⁾	6,522		—		—		—		—		—		6,522
	$	6,910	$	155	$	155	$	58	$	—	$	—	$	7,278

⁽¹⁾ Given the nature of these investments, the Company is unable to determine with any degree of accuracy when these commitments will be called. Therefore, for purposes of the above table, the Company has assumed that all commitments with no fixed payment schedules will be called during the year ending December 31, 2018.

Litigation

From time to time in the normal course of business, the Company may be involved in formal and informal dispute resolution procedures, which may include arbitration or litigation, the outcomes of which determine the rights and obligations under the Company’s reinsurance contracts and other contractual agreements. In some disputes, the Company may seek to enforce its rights under an agreement or to collect funds owing to it. In other matters, the Company may resist attempts by others to collect funds or enforce alleged rights. While the final outcome of legal disputes cannot be predicted with certainty, the Company does not believe that any existing dispute, when finally resolved, will have a material adverse effect on the Company’s business, financial condition or operating results.