Bank Line of Credit

9 Months Ended

Sep. 30, 2015

Debt Disclosure [Abstract]

Bank Line of Credit

Note 8.  Bank Line of Credit

As of September 30, 2015, Indemnity has access to a $100 million bank revolving line of credit with a $25 million letter of credit sublimit that expires on November 3, 2018. As of September 30, 2015, a total of $98 million remains available under the facility due to $2 million outstanding letters of credit, which reduce the availability for letters of credit to $23 million.  Indemnity had no borrowings outstanding on its line of credit as of September 30, 2015.  Bonds with a fair value of $111 million were pledged as collateral on the line at September 30, 2015. On October 28, 2015, Indemnity extended the maturity date of the revolving credit facility to November 3, 2020.

As of September 30, 2015, the Exchange has access to a $300 million bank revolving line of credit with a $25 million letter of credit sublimit that expires on October 25, 2018. As of September 30, 2015, a total of $299 million remains available under the facility due to $1 million outstanding letters of credit, which reduce the availability for letters of credit to $24 million.  The Exchange had no borrowings outstanding on its line of credit as of September 30, 2015.  Bonds with a fair value of $326 million were pledged as collateral on the line at September 30, 2015. On October 28, 2015, the Exchange amended the bank revolving line of credit to $400 million and extended the maturity date to October 28, 2020. The increase in the line of credit to $400 million was driven by both favorable credit market conditions and increased need based on Exchange's growth in business.

Both lines have securities pledged as collateral that have no trading restrictions and are reported as available-for-sale fixed maturities in the Consolidated Statements of Financial Position as of September 30, 2015.  The banks require compliance with certain covenants, which include leverage ratios for Indemnity’s line of credit and statutory surplus and risk based capital ratios for the Exchange’s line of credit.  We are in compliance with all covenants at September 30, 2015.