8. Debt

12 Months Ended

Dec. 31, 2012

Debt Disclosure [Abstract]

Note 8 - Debt

The terms of our debt outstanding at December 31, 2012 and 2011 are summarized below:

	December 31,
	2012		2011
	(In thousands)
Residual interest financing
Notes secured by our residual interests in securitizations. In September 2012, the maturity was extended to September 2013. The aggregate indebtedness under this facility was $13.8 million at December 31, 2012. It bears interest at 12.875% over one-month LIBOR, which was 13.08% at December 31, 2012.	$	13,773	$	21,884
Senior secured debt, related party
Notes payable to Levine Leichtman Capital Partners IV, L.P. (“LLCP”). LLCP is considered a related party because its beneficial ownership interest in our common stock is greater than 20%. The notes consist of three 16% term notes for $52.75 million all due in December 2013. The amount outstanding at December 31, 2012 is net of the unamortized debt discount of $2.6 million relating to the valuation of 1,225,000 shares of stock, warrants to purchase 1,611,114 shares of our common stock at an exercise price of $1.3982, warrants to purchase 285,781 of our common stock at an exercise price of $0.01 and $1.4 million in cash paid to the lender at issuance. In addition, the unamortized debt discount includes the valuation of 2,750,000 shares of common stock and $2.75 million in cash paid to the lender at issuance of one of the 16% notes. All LLCP debt is secured by substantially all of our assets that are not securing warehouse, residual interest or securitization trust debt.		50,135		58,344
Subordinated renewable notes
Notes bearing interest rates ranging from 6.00% to 16.85%, with a weighted average rate of 14.36%. Maturities range from January 2013 to December 2022 with a weighted average maturity of June 2015. We began issuing the notes in June 2005 and incurred issuance costs of $250,000. Payments are made monthly, quarterly, annually or upon maturity based on the terms of the individual notes.		23,281		20,750
	$	87,189	$	100,978

The outstanding debt on our warehouse lines of credit was $21.7 million as of December 31, 2012, compared to $25.4 million outstanding as of December 31, 2011. See Note 16 for a discussion of our warehouse lines of credit.

The costs incurred in conjunction with the above debt are recorded as deferred financing costs on the accompanying consolidated balance sheets and are more fully described in Note 1.

We must comply with certain affirmative and negative covenants related to debt facilities, which require, among other things, that we maintain certain financial ratios related to liquidity, net worth and capitalization. Further covenants include matters relating to investments, acquisitions, restricted payments and certain dividend restrictions. See the discussion of financial covenants in footnote 1.

The following table summarizes the contractual and expected maturity amounts of debt as of December 31, 2012:

Contractual maturity date	Residual interest financing (1)		Senior secured debt (2)		Subordinated renewable notes		Total
(In thousands)
2013	$	13,773	$	50,135	$	12,118	$	76,026
2014		–		–		5,521		5,521
2015		–		–		1,556		1,556
2016		–		–		2,739		2,739
2017		–		–		166		166
Thereafter		–		–		1,181		1,181
Total	$	13,773	$	50,135	$	23,281	$	87,189

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(1) The contractual maturity date for the residual interest financing debt was extended to September 2013.

(2) The senior secured debt is shown net of unamortized debt discounts of $2.6 million. On a gross basis the scheduled maturity of this debt is $52.8 million in December 2013.