As of September 30, 2022, the Company's debt is comprised of four instruments: $24.4 million of publicly traded senior unsecured notes which were issued in 2018, a $10.0 million line of credit which commenced in June 2018, $10.5 million of privately placed subordinated notes, and a loan of $14.5 million from the Federal Home Loan Bank (“FHLB”) of Indianapolis, which commenced in July 2022. A summary of the Company's outstanding debt is as follows (dollars in thousands):

	September 30, 2022		December 31, 2021
Senior unsecured notes *	$	24,121	$	23,926
Subordinated notes *		9,677		9,638
FHLB of Indianapolis		14,500		—
Total	$	48,298	$	33,564

The Company issued $25.3 million of public senior unsecured notes (the "Notes") in 2018. The Notes bear an interest rate of 6.75% per annum, payable quarterly at the end of March, June, September and December and mature on September 30, 2023. The Company may redeem the Notes, in whole or in part, at face value at any time after September 30, 2021.

The Company did not repurchase any of the Notes for the three and nine months ended September 30, 2022 and 2021.

Management plans to issue new public debt that will provide sufficient cash flow to pay off the senior unsecured notes that are coming due within the next twelve months. Management believes it is probable that it will be able to issue new public debt and repay the senior unsecured notes by September 30, 2023.

The Company also has outstanding $10.5 million of Subordinated Notes maturing on September 30, 2038. The Subordinated Notes bear an interest rate of 7.5% per annum until September 30, 2023, and 12.5% thereafter, and allow for four quarterly interest payment deferrals. Interest is payable quarterly at the end of March, June, September and December. Beginning September 30, 2021, the Company may redeem the Subordinated Notes, in whole or in part, for a call premium of $1.1 million. The call premium escalates each quarter to ultimately $1.75 million on September 30, 2023, then steps up to $3.05 million on December 31, 2023, and increases quarterly at a 12.5% per annum rate thereafter.

As of September 30, 2022, the carrying value of the Notes and Subordinated Notes are offset by $260,000 and $823,000 of debt issuance costs, respectively. The debt issuance costs will be amortized through interest expense over the life of the loans.

The Subordinated Notes contain restrictive financial debt covenants that relate to the Company’s minimum tangible net worth, minimum fixed-charge coverage ratios, dividend paying capacity, reinsurance retentions, risk-based capital ratios, and debt-to-total capital. As of March 31, 2022, the Company was not in compliance with the tangible net worth and the debt-to-total capital financial covenants, principally due to changes in unrealized fair values of the bond portfolio resulting from the significant increase in the interest rate environment. On May 9, 2022, the holders of the Subordinated Notes waived the March 31, 2022 tangible net worth and debt-to-total capital requirements and the agreement was amended to exclude changes in unrealized gains or losses in the debt securities investment portfolio of the Company subsequent to December 31, 2021, when calculating the debt covenant ratios.

As of June 30, 2022, the Company was not in compliance on the tangible net worth covenant of the Subordinated Notes. On August 8, 2022, the holders of the Subordinated Notes waived the June 30, 2022 tangible net worth requirement. The $5.0 million contribution to the Company on August 10, 2022 (see Note 8 ~ Shareholder’s Equity), increased the net worth sufficiently to bring the Company back into compliance. At September 30, 2022, the Company was in compliance with all of its financial covenants.

The Company maintains a $10.0 million line of credit with a national bank (the “Lender”). The line of credit bears interest at the London Interbank rate ("LIBOR") plus 2.75% per annum, payable monthly. On June 18, 2021, the line of credit was renewed with a maturity of December 1, 2022. The line of credit contains restrictive financial debt covenants that relate to the Company’s minimum tangible net worth, minimum fixed-charge coverage ratios, dividend paying capacity, reinsurance retentions, risk-based capital ratios, and debt-to-total capital. On August 8, 2022, the Company entered into an amendment with the Lender which eliminated the financial debt covenant requirements if there is no outstanding balance going forward, and requires prior bank approval for any future draws on the line of credit. As of September 30, 2022, the Company had no balance outstanding on the line of credit.

On July 7, 2022, the Company borrowed $14.5 million from the FHLB of Indianapolis. The loan is fully collateralized with high-quality federally guaranteed debt securities and cash. The loan was drawn for short-term cash needs to avoid realizing losses on a statutory accounting basis due to temporary market-timing issues caused by the recent fluctuations in the interest rate markets. The loan has a daily floating interest rate that was 3.45% per annum as of September 30, 2022. The loan matures on January 9, 2023.

On April 24, 2020, the Company received a $2.7 million loan from the line of credit Lender pursuant to the Paycheck Protection Program of the CARES Act administered by the U.S. Small Business Administration (“SBA”). The Company received notice from the SBA that the loan was 100% forgiven, including accrued interest, on July 8, 2021. This resulted in a $2.8 million gain that was included in Other Gains on the Consolidated Statement of Operations in the third quarter of 2021.