Notes Payable

Notes payable consists of the following:



				December 31,
	Lender	Interest Rate	Expiration	2013		2012
				(Amounts in thousands)
Secured credit facility	Bank of America	LIBOR plus 40 basis points	July 31, 2016	$	120,000	$	120,000
Secured loan	Union Bank	LIBOR plus 40 basis points	January 2, 2015	20,000		20,000
Unsecured credit facility	Bank of America and Union Bank	(1)	June 30, 2018	50,000		0
Total				$	190,000	$	140,000

__________

(1)

On July 2, 2013, the Company entered into an unsecured $200 million five-year revolving credit facility. The interest rate on borrowings under the credit facility is based on the Company's debt to total capital ratio and ranges from LIBOR plus 112.5 basis points when the ratio is under 15% to LIBOR plus 162.5 basis points when the ratio is above 25%. Commitment fees for undrawn portions of the credit facility range from 12.5 basis points when the ratio is under 15% to 22.5 basis points when the ratio is above 25%. In 2013, the interest rate was LIBOR plus 112.5 basis points on the $50 million of borrowings and 12.5 basis points on the undrawn portions of the credit facility.

The $120 million credit facility and $20 million bank loan are secured by municipal bonds held as collateral. These secured notes call for the collateral requirement to be greater than the loan amount. The collateral requirement is calculated as the fair market value of the municipal bonds held as collateral multiplied by the advance rates, which vary based on the credit quality and duration of the assets held and range between 75% and 100% of the fair value of each bond.

The bank loan and credit facilities contain financial covenants pertaining to minimum statutory surplus, debt to capital ratio, and risk-based capital (“RBC”) ratio. The Company was in compliance with all of its loan covenants at December 31, 2013.

The aggregated maturities for notes payable are as follows:



Year	Maturity
	(Amounts in thousands)
2014	$	0
2015	$	20,000
2016	$	120,000
2017	$	0
2018	$	50,000

For additional disclosures regarding methods and assumptions used in estimating fair values of interest rate swap agreements associated with the Company’s loans listed above, see Note 7.