NOTE 11 - BORROWINGS

The credit facilities and other debt of the Company and related borrowings outstanding are as follows (in thousands):



	As of December 31, 2014				As of December 31, 2013
	Availability		Borrowings Outstanding		Borrowings Outstanding
Credit facilities:
TD Bank – secured revolving credit facility ⁽¹⁾	$	10,997	$	—	$	—
Republic Bank – secured revolving credit facility	3,000		—		—
			—		—
Other debt:
Senior Notes			10,000		10,000
Mortgage debt			10,088		10,287
Other debt			324		332
Total borrowings outstanding			$	20,412	$	20,619


(1)	The availability of the facility as shown has been reduced for outstanding letter of credit of $503,000 at December 31, 2014.

Corporate and Real Estate Debt

TD Bank, N.A. (“TD Bank”). In March 2011, the Company entered into a line of credit loan agreement with TD Bank that, through April 24, 2014, allowed for borrowings up to $7.5 million with interest at either (a) the prime rate plus 2.25% or (b) London Interbank Offered Rate ("LIBOR") plus 3%. The LIBOR rate varies from one to six months depending upon the period of the borrowing. In April 2014, the Company amended the its TD facility to (i) extend the maturity date to the earlier of (a) the expiration of its management agreement with RSO or (b) December 31, 2017; (ii) increase the maximum borrowing amount to $11.5 million provided that the Company maintains an aggregate value of pledged securities of $6.0 million; and (iii) require that the Company have no cash advances outstanding for 30 consecutive days during each 1-year period beginning on April 25, 2014. The Company is charged an annual unused facility fee of 0.5% and a 5.25% annual fee on the $503,000 outstanding letter of credit.

Borrowings are secured by a first priority security interest in certain of the Company's assets and the guarantees of certain subsidiaries, including (i) the present and future fees and investment income earned in connection with the management of, and investments in, sponsored CDO issuers, (ii) a pledge of 18,972 shares of TBBK common stock, and (iii) a pledge of 2,160,671 shares of RSO common stock held by the Company. Availability under the facility is limited to the lesser of (a) 75% of the net present value of future RSO base management fees to be earned or (b) the maximum revolving credit facility amount.

As of December 31, 2014, there were no borrowings outstanding and availability on the TD facility was $11.5 million, before reduction for an outstanding letter of credit. Weighted average borrowings on the line of credit for 2014 and 2013 were $0 and $147,945, respectively, at a weighted average borrowing rate of 0.0% and 3.2%, respectively.

Republic First Bank (“Republic Bank”). In February 2011, the Company entered into a $3.5 million revolving credit facility with Republic Bank. The facility bears interest at the prime rate of interest plus 1% with a floor of 4.5%. The loan is secured by a pledge of 700,000 shares of RSO stock and a first priority security interest in certain real estate collateral located in Philadelphia, Pennsylvania. Availability under this facility is limited to the lesser of (a) the sum of (i) 25% of the appraised value of the real estate, based upon the most recent appraisal delivered to the bank and (ii) 100% of the cash and 75% of the market value of the pledged RSO shares held in the pledged account; and (b) 100% of the cash and 100% of the market value of the pledged RSO shares held in the pledged account. The loan has an annual unused facility fee equal to 0.25%. In November 2013, the Company further amended this facility to extend the maturity date to December 28, 2016 and increase the unused fee to 0.50%. As of December 31, 2014, there were no outstanding borrowings and availability under this facility was $3.0 million.

Senior Notes

The Company's $10.0 million of 9% senior notes (the "Senior Notes") were originally issued with detachable 5-year warrants to purchase a total of 3,690,195 shares of common stock, all of which have been exercised as of December 31, 2014. The effective interest rate for 2014 and 2013 was 9.3% and 9.7%, respectively. On August 28, 2014, the Senior Notes were modified to extend the maturity date from March 31, 2015 to March 31, 2018 and to include an early redemption feature. The Company may early redeem all or any part of the Senior Notes upon notification to the note holders at the redemption price plus any accrued and unpaid interest through to the date of such redemption. The redemption price will be at a premium to par, as follows: prior to March 31, 2016 at 102%, between March 31, 2016 and March 31, 2017 at 101%, and thereafter at 100%.

Other Debt - Real Estate and Corporate

Real estate − mortgage. In August 2011, the Company obtained a $10.7 million mortgage for its hotel property in Savannah, Georgia. The 6.36% fixed rate mortgage, which matures in September 2021, requires monthly principal and interest payments of $71,331. The principal balance as of December 31, 2014 and 2013 was $10.1 million and $10.3 million, respectively.

Corporate - capital leases. In October 2013, the Company entered into a capital lease for the purchase of computer equipment at an interest rate of 6.5%. The two-year lease requires monthly payments of $16,377. The principal balance of the lease at December 31, 2014 was $127,752. In June 2014, the Company entered into a three-year capital lease for the purchase of computer equipment with monthly payments of $4,205. The principal balance of the lease at December 31, 2014 was $120,256. In December 2014, the Company entered into a thirty-nine month capital lease with monthly interest payments of $1,985. The principal balance of the lease at December 31, 2014 was $75,328.

Debt repayments

Annual principal payments on the Company’s aggregate borrowings for the next five years ending December 31, and thereafter, are as follows (in thousands):



2015	$	407
2016	297
2017	289
2018	10,262
2019	273
Thereafter	8,884
Total	$	20,412

Covenants

The TD Bank credit facility is subject to certain financial covenants, which are customary for the type and size of the facility, including debt service coverage and debt to equity ratios. The debt to equity ratio restricts the amount of recourse debt the Company can incur based on a ratio of recourse debt to net worth.

The covenant for the mortgage on the Company's hotel property requires maintaining a minimum debt coverage ratio. Although non-recourse in nature, the loan is subject to limited standard exceptions (or “carveouts”) which the Company has guaranteed. These carveouts will expire as the loan is paid down over the next ten years. The Company has control over the operations of the underlying property, which mitigates the potential risk associated with these carveouts and, accordingly, no liabilities for these obligations have been recorded in the consolidated financial statements. To date, the Company has not been required to make any carveout payments.

The Company was in compliance with all of its debt covenants as of December 31, 2014.