Short-Term Borrowings and Other Debt

3 Months Ended

Mar. 31, 2013

As of March 31, 2013 and 2012, short term borrowings and other debt of the Company were as follows:



	As of March 31,		As of December 31,
	2013		2012
	(dollars in thousands)
Notes payable	$	1,799	$	206
Capital lease obligations	3,580		3,926
	$	5,379	$	4,132

In January 2013, the Company borrowed $2 million to fund insurance premium payments. This notes bears interest at 2.22% and is due on December 1, 2013, with monthly payment requirements of $0.2 million. As of March 31, 2013, the outstanding balance on this note payable was $1.6 million. Interest expense for the three months ended March 31, 2013 was insignificant.

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 March 31, 2013, the remaining balance on these capital leases was $3.6 million. Interest expense was $0.1 million and $0.1 million for the three months ended March 31, 2013 and 2012, respectively.

As of March 31, 2013, the Company has five 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, 2013, 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 and $1.8 million which expires February 22, 2014 and July 15, 2013, respectively, supporting the leases 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 March 31, 2013 and 2012, 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 March 31, 2013, are as follows:



	Capital Lease Obligation			Short Term Borrowings
	(dollars in thousands)
2013	$	1,158		$	1,808
2014	1,402			46
2015	1,051			—
2016	194			—
2017	—			—
Thereafter	—			—
Subtotal	3,805			1,854
Less: Amount representing interest (a)	(225		)	(55		)
Total	$	3,580		$	1,799


(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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