8. Financing

Short-term borrowings at December 31, 2011 and October 1, 2011 consist of the following:

	December 31,		October 1,
	2011		2011
	(expressed in thousands)
Bank line of credit, monthly U.S. LIBOR plus 45 basis points (0.76% rate in effect at December 31, 2011), maturing January 2012, with optional month-to-month term renewal and loan repricing until December 2012	$	40,000	$	40,000
Notes payable, non-interest bearing		240		285
Total short-term borrowings	$	40,240	$	40,285

The Company's credit facility provides for up to $75.0 million for working capital financing, acquisitions, share purchases, or other general corporate purposes and expires in December 2012. At December 31, 2011 and October 1, 2011, outstanding borrowings under the credit facility were $40.0 million. At December 31, 2011, the Company had outstanding letters of credit drawn from the credit facility totaling $7.8 million, leaving approximately $27.2 million of unused borrowing capacity. In order to mitigate its exposure to interest rate increases on certain of its floating rate indebtedness, the Company has entered into floating to fixed interest rate swaps. At December 31, 2011 and October 1, 2011, the Company had outstanding interest rate swaps with total notional amounts of $40.0 million and $24 million, respectively. At December 31, 2011 and October 1, 2011, under the terms of the credit facility borrowings and interest rate swap agreements, the effective weighted average interest rate applicable to outstanding credit facility borrowings was 2.09% and 2.47%, respectively. At December 31, 2011 and October 1, 2011, there was a 45 basis-point differential between the variable rate interest paid by the Company on its outstanding credit facility borrowings and the variable rate interest received on the interest rate swaps. As a result of this differential, the overall effective interest rate applicable to outstanding credit facility borrowings, under the terms of the credit facility and interest rate swap agreements, was 2.54% and 2.92%, respectively. The Company intends to renew each of the applicable outstanding borrowings on the credit facility monthly throughout the entire term of the interest rate swap arrangement directly associated with the borrowing. Subsequent to December 31, 2011, the Company renewed each of the outstanding borrowings on the credit facility for an additional month. See Note 5 in the Condensed Notes to Consolidated Financial Statements for additional information on the interest rate swaps.