Short-Term Borrowings and Other Debt

9 Months Ended

Sep. 30, 2013

As of September 30, 2013 and December 31, 2012, short term borrowings and other debt of the Company were as follows:



	As of September 30, 2013		As of December 31, 2012
	(dollars in thousands)
Notes payable	$	491	$	206
Capital lease obligations	2,878		3,926
	$	3,369	$	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 September 30, 2013, the outstanding balance on this note payable was $0.5 million. Interest expense for the three and nine months ended September 30, 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 September 30, 2013, the remaining balance on these capital leases was $2.9 million. Interest expense was $0.1 million and $0.1 million for the three months ended September 30, 2013 and 2012, respectively, and $0.1 million and $0.1 million for the nine months ended September 30, 2013 and 2012, respectively.

As of September 30, 2013, the Company has the following five irrevocable letters of credit related to leased office space, for which there is cash collateral pledged, which the Company pays a fee on the stated amount of the letter of credit.



Location	Amount		Maturity
	(dollars in thousands)
San Francisco	$	82	May 12, 2014
New York	$	1,191	September 3, 2014
New York	$	6,746	December 12, 2013
New York	$	1,000	February 22, 2014
New York	$	1,861	March 19, 2014

To the extent any letter of credit is drawn upon, interest will be assessed at the prime commercial lending rate. As of September 30, 2013 and December 31, 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 September 30, 2013, are as follows:



	Capital Lease Obligation			Short Term Borrowings
	(dollars in thousands)
2013	$	385		$	464
2014	1,402			46
2015	1,051			—
2016	194			—
2017	—			—
Thereafter	—			—
Subtotal	3,032			510
Less: Amount representing interest (a)	(154		)	(19		)
Total	$	2,878		$	491


(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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