Short-Term Borrowings and Other Debt

9 Months Ended

Sep. 30, 2012

As of September 30, 2012 and December 31, 2011, short term borrowings and other debt of the Company were as follows:



	As of September 30, 2012		As of December 31, 2011
	(dollars in thousands)
Notes payable	$	246	$	370
Capital lease obligations	4,270		5,280
	$	4,516	$	5,650

The Company entered into several capital leases for computer equipment during the fourth quarter of 2010. These leases amount to $6.3 million and are recorded in fixed assets and as capital lease obligations, which are included in short-term borrowings and other debt in the accompanying condensed consolidated statements of financial condition, and have lease terms that range from 48 to 60 months and interest rates that range from 0.60% to 6.14%. As of September 30, 2012, the remaining balance on these capital leases was $4.3 million. Interest expense for the three months ended September 30, 2012 and 2011 was $0.1 million and $0.1 million, respectively, and was $0.1 million and $0.1 million for the nine months ended September 30, 2012 and 2011, respectively.

As of September 30, 2012, the Company has four irrevocable letters of credit, for which there is cash collateral pledged, including (i) $82,000, which expires on May 12, 2013, supporting the Company's San Francisco office, (ii) $1.2 million which expires on September 3, 2013, supporting the Company's lease of additional office space in New York, (iii) $6.7 million, which expires December 12, 2012, supporting the lease of office space in New York which the Company pays a fee on the stated amount of the letter of credit and (iv) $1.0 million which expires February 22, 2013, supporting the lease of additional office space in New York.

To the extent any letter of credit is drawn upon, interest will be assessed at the prime commercial lending rate. As of September 30, 2012 and December 31, 2011, there were no amounts due related to these letters of credit.

Annual scheduled maturities of debt and minimum lease payments for capital lease obligation and short term borrowings and other debt outstanding as of September 30, 2012, are as follows:



	Capital Lease Obligation			Short Term Borrowings
	(dollars in thousands)
2012	$	386		$	46
2013	1,541			183
2014	1,402			46
2015	1,051			—
2016	194			—
Thereafter	—			—
Subtotal	4,574			275
Less: Amount representing interest (a)	(304		)	(29		)
Total	$	4,270		$	246


(a)	Amount necessary to reduce net minimum lease payments to present value calculated at the Company's implicit rate at lease inception.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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