8. Financing

Short-term borrowings at June 30, 2012 and October 1, 2011 consist of the following:


	June 30, 2012		October 1, 2011
	(expressed in thousands)
Bank line of credit, monthly U.S. LIBOR plus 45 basis points (0.70% rate in effect at June 30, 2012), maturing July 2012, with optional month-to-month term renewal and loan repricing until December 2012	$	40,000	$	40,000
Notes payable, non-interest bearing		239		285
Total short-term borrowings	$	40,239	$	40,285

The Company's credit facility provides for up to $75.0 million for working capital financing, acquisitions, share purchases, or other general corporate purposes and expires in December 2012. At June 30, 2012 and October 1, 2011, outstanding borrowings under the credit facility were $40.0 million. At June 30, 2012, the Company had outstanding letters of credit drawn from the credit facility totaling $10.0 million, leaving approximately $25.0 million of unused borrowing capacity. In order to mitigate its exposure to interest rate increases on certain of its floating rate indebtedness, the Company has entered into floating to fixed interest rate swaps. At June 30, 2012 and October 1, 2011, the Company had outstanding interest rate swaps with total notional amounts of $40.0 million and $24.0 million, respectively. At June 30, 2012 and October 1, 2011, under the terms of the credit facility borrowings and interest rate swap agreements, the effective weighted average interest rate applicable to outstanding credit facility borrowings was 2.09% and 2.47%, respectively. At June 30, 2012 and October 1, 2011, there was a 45 basis-point differential between the variable rate interest paid by the Company on its outstanding credit facility borrowings and the variable rate interest received on the interest rate swaps. As a result of this differential, the overall effective interest rate applicable to outstanding credit facility borrowings, under the terms of the credit facility and interest rate swap agreements, was 2.54% and 2.92%, respectively. The Company intends to renew each of the applicable outstanding borrowings on the credit facility monthly throughout the entire term of the interest rate swap arrangement directly associated with the borrowing. Subsequent to June 30, 2012, the Company renewed each of the outstanding borrowings on the credit facility for an additional month. See Note 5 in the Condensed Notes to Consolidated Financial Statements for additional information on the interest rate swaps.