Debt, net

6 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

Debt, net

Debt, net

The following table presents the balance of the Company’s debt obligations, net of discounts and deferred financing costs for our corporate and asset based debt. Asset based debt is generally recourse only to specific assets and related cash flows.

	As of June 30, 2024
Corporate debt	Insurance		Mortgage		Total
Secured revolving credit agreements (1)	$	100,500	$	—	$	100,500
Preferred trust securities (LIBOR + 4.10%)	35,000		—		35,000
8.50% Junior subordinated notes	125,000		—		125,000
Total corporate debt	260,500		—		260,500
Asset based debt
Asset based revolving financing (SOFR + 2.75%)	76,139		—		76,139
Residential mortgage warehouse borrowings (1.75% to 2.50% over SOFR) (2)(3)	—		59,287		59,287
Total asset based debt	76,139		59,287		135,426
Total debt, face value	336,639		59,287		395,926
Unamortized deferred financing costs	(8,473)		(115)		(8,588)
Total debt, net	$	328,166	$	59,172	$	387,338
	As of December 31, 2023
Corporate debt	Insurance		Mortgage		Total
Secured revolving credit agreements (1)	$	130,000	$	—	$	130,000
Preferred trust securities (LIBOR + 4.10%)	35,000		—		35,000
8.50% Junior subordinated notes	125,000		—		125,000
Total corporate debt	290,000		—		290,000
Asset based debt
Asset based revolving financing (LIBOR + 2.75%)	67,138		—		67,138
Residential mortgage warehouse borrowings (1.75% to 2.75% over SOFR) (2)(3)	—		54,350		54,350
Total asset based debt	67,138		54,350		121,488
Total debt, face value	357,138		54,350		411,488
Unamortized deferred financing costs	(8,950)		(127)		(9,077)
Total debt, net	$	348,188	$	54,223	$	402,411

(1)    The secured credit agreements include separate tranches with multiple rate structures that are adjustable based on Fortegra’s senior leverage ratio, which as of June 30, 2024 and December 31, 2023 was SOFR + 1.50%.

(2)    As of June 30, 2024, included (i) a $50,000 line of credit at 1.75%, 2.00% and 2.50% over the one month SOFR rate, (ii) a $25,000 line of credit at 1.75% or 2.25% over the one month SOFR rate, with a floor of 4.00%, (iii) a $25,000 line of credit at 1.875% over the one month SOFR rate and (iv) a $25,000 line of credit at 1.75% over the one month SOFR rate. As of December 31, 2023, included (i) a $50,000 line of credit at 1.75%, 2.00% and 2.50% over the one month SOFR rate, and (ii) a $65,000 line of credit at 1.75%, 2.25% and 2.75% over the one month SOFR rate, with a floor of 4.00%.

(3)    The weighted average coupon rate for residential mortgage warehouse borrowings was 7.18% and 7.15% at June 30, 2024 and December 31, 2023, respectively.

The following table presents the amount of interest expense the Company incurred on its debt for the following periods:

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Interest expense - corporate debt	$	5,887	$	4,896	$	11,889	$	9,326
Interest expense - asset based debt	2,128		2,148		4,416		4,183
Total interest expense on debt	$	8,015	$	7,044	$	16,305	$	13,509

The following table presents the contractual principal payments and future maturities of the unpaid principal balance on the Company’s debt for the following periods:

	As of June 30, 2024
Remainder of 2024	$	34,665
2025	24,622
2026	76,139
2027	100,500
2028	—
2029 and thereafter	160,000
Total	$	395,926

The following narrative is a summary of certain terms of our debt agreements for the six months ended June 30, 2024:

Corporate Debt

Secured Revolving Credit Agreements

As of June 30, 2024 and December 31, 2023, a total of $100,500 and $130,000, respectively, was outstanding under the revolving line of credit in our insurance business. The maximum borrowing capacity under the agreements as of June 30, 2024 was $200,000.

Asset Based Debt

Asset Based Revolving Financing

On October 6, 2023, subsidiaries of Fortegra amended the asset based revolving financing to increase the revolving commitment to $125,000 and transition to SOFR. As of June 30, 2024 and December 31, 2023, a total of $76,139 and $67,138, respectively, was outstanding under the borrowing related to our premium finance offerings in our insurance business.

Residential Mortgage Warehouse Borrowings

As of June 30, 2024, our mortgage business had four warehouse lines of credit with four separate lending partners totaling $125,000 of borrowing capacity. The $50,000 line of credit matures in August 2024 and the three $25,000 lines of credit mature in September 2024, February 2025, and June 2025. As of June 30, 2024 and December 31, 2023, a total of $59,287 and $54,350, respectively, was outstanding under such financing agreements.

Mortgage Servicing Rights (MSR) Line of Credit

As of June 30, 2024, our mortgage business had a MSR line of credit with M&T Bank totaling $10,000 of borrowing capacity at 3.30% over SOFR, with no borrowings outstanding at the end of the period.