Securities Available-for-Sale

9 Months Ended

Sep. 30, 2011

Securities Available-for-Sale

Securities Available-for-Sale

Note 4. Securities Available-for-Sale

The following table summarizes the Company’s securities classified as available-for-sale as of September 30, 2011 and December 31, 2010, which are carried at estimated fair value (amounts in thousands):

	September 30, 2011									December 31, 2010
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Corporate debt securities	$	712,118	$	84,823	$	(21,950	)	$	774,991	$	646,638	$	192,496	$	(3,614	)	$	835,520
Common and preferred stock	13,484		—		(2,280		)	11,204		3,117		257		—			3,374
Total	$	725,602	$	84,823	$	(24,230	)	$	786,195	$	649,755	$	192,753	$	(3,614	)	$	838,894

The following table shows the gross unrealized losses and fair value of the Company’s available-for-sale securities, aggregated by length of time that the individual securities have been in a continuous unrealized loss position as of September 30, 2011 and December 31, 2010 (amounts in thousands):

	Less Than 12 months					12 Months or More					Total
	Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses
September 30, 2011
Corporate debt securities	$	322,052	$	(21,238	)	$	21,638	$	(712	)	$	343,690	$	(21,950	)
Common and preferred stock	11,204		(2,280		)	—		—			11,204		(2,280		)
Total	$	333,256	$	(23,518	)	$	21,638	$	(712	)	$	354,894	$	(24,230	)
December 31, 2010
Corporate debt securities	$	41,656	$	(1,331	)	$	36,631	$	(2,283	)	$	78,287	$	(3,614	)

The unrealized losses in the table above are considered to be temporary impairments due to market factors and are not reflective of credit deterioration. The Company considers many factors when evaluating whether an impairment is other-than-temporary. For corporate debt securities included in the table above, the Company does not intend to sell them and does not believe that it is more likely than not that the Company will be required to sell any of its corporate debt securities prior to recovery. In addition, based on the analyses performed by the Company on each of its corporate debt securities, the Company believes that it is able to recover the entire amortized cost amount of the corporate debt securities included in the table above.

During both the three and nine months ended September 30, 2011, the Company recognized losses totaling $1.5 million for corporate debt securities that it determined to be other-than-temporary impaired based on the criteria above. During the three and nine months ended September 30, 2010, the Company recognized losses totaling $0.5 million and $1.7 million, respectively, for corporate debt securities that it determined to be other-than-temporarily impaired. The Company intended to sell these securities and as a result, the entire amount was recorded through earnings in net realized and unrealized gain on investments in the condensed consolidated statements of operations.

For equity securities included in the table above, because the Company has the intent and ability to hold these equity securities until recovery, the related unrealized losses are not considered to be other-than-temporary impairments. During the three and nine months ended September 30, 2011 and 2010, the Company did not recognize any loss for common and preferred stock that it determined to be other-than-temporary impaired based on the criteria above.

As of September 30, 2011, the Company had no corporate debt securities in default. As of December 31, 2010, the Company had corporate debt securities in default with an estimated fair value of $1.1 million from one issuer.

Corporate debt securities sold at a loss typically include those that the Company determined to be other-than-temporarily impaired or had a deteriorated credit quality. The following table shows the net realized gains on the sales of securities (amounts in thousands):

	For the three months ended September 30, 2011		For the three months ended September 30, 2010		For the nine months ended September 30, 2011			For the nine months ended September 30, 2010
Gross realized gains	$	33,881	$	17,598	$	70,822		$	60,398
Gross realized losses	—		—		(477		)	—
Net realized gains	$	33,881	$	17,598	$	70,345		$	60,398

The Company’s securities available-for-sale portfolio has certain credit risk concentrated in a limited number of issuers. As of September 30, 2011, approximately 47% of the estimated fair value of the Company’s securities available-for-sale portfolio was concentrated in ten issuers, with the two largest concentrations of securities available-for-sale in securities issued by First Data Corporation and SandRidge Energy, Inc., which combined represented $127.0 million, or approximately 16% of the estimated fair value of the Company’s securities available-for-sale. As of December 31, 2010, approximately 60% of the estimated fair value of the Company’s securities available-for-sale portfolio was concentrated in ten issuers, with the two largest concentrations of securities available-for-sale in securities issued by NXP BV and First Data Corporation, which combined represented $208.6 million, or approximately 25% of the estimated fair of value of the Company’s securities available-for-sale.

Note 7 to these condensed consolidated financial statements describes the Company’s borrowings under which the Company has pledged securities available-for-sale for borrowings. The following table summarizes the estimated fair value of securities available-for-sale pledged as collateral as of September 30, 2011 and December 31, 2010 (amounts in thousands):

	As ofSeptember 30, 2011		As of December 31, 2010
Pledged as collateral for collateralized loan obligation secured debt and junior secured notes to affiliates	$	690,336	$	728,558
Total	$	690,336	$	728,558