Short-Term Borrowings and Other Debt

12 Months Ended

Dec. 31, 2013

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



	As of December 31,
	2013		2012
	(dollars in thousands)
Notes payable	$	41	$	206
Capital lease obligations	2,523		3,926
	$	2,564	$	4,132

In January 2013, the Company borrowed $2.0 million to fund insurance premium payments. This note bears interest at 2.22% and was due on December 1, 2013, with monthly payment requirements of $0.2 million. As of December 31, 2013, the outstanding balance on this note payable was fully repaid. Interest expense for the year ended December 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 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 December 31, 2013, the remaining balance on these capital leases was $2.5 million. Approximately $0.9 million of capital lease obligations held at December 31, 2013 were terminated in January 2014 (See Note 28). Interest expense was $0.1 million, $0.2 million, and $0.2 million for the years ended December 31, 2013, 2012, and 2011, respectively.

As of December 31, 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 2014
New York	$	1,191	September 2014
New York	$	6,746	December 2014
New York	$	1,000	February 2014
New York	$	1,861	March 2014

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



	Capital Lease Obligation			Notes payable
	(dollars in thousands)
2014	$	1,402		$	46
2015	1,051			—
2016	194			—
2017	—			—
2018	—			—
Thereafter	—			—
Subtotal	2,647			46
Less: Amount representing interest (a)	(124		)	(5		)
Total	$	2,523		$	41


(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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