Short-Term Borrowings and Long-Term Debt

6 Months Ended

Jun. 30, 2012

Short-Term Borrowings and Long-Term Debt

7. Short-Term Borrowings and Long-Term Debt

The following table represents outstanding short-term borrowings and long-term debt at June 30, 2012 and December 31, 2011:

				Carrying Value
(Dollars in thousands)	Maturity	Principal value at  June 30, 2012		June 30,    2012		December 31,  2011
Short-term borrowings:
Other short-term borrowings	(1)	$	5,880	$	5,880	$	-
Total short-term borrowings				$	5,880	$	-
Long-term debt:
5.375% Senior Notes	September 15, 2020	$	350,000	$	347,893	$	347,793
5.70% Senior Notes (2)	June 1, 2012		-		-		143,969
6.05% Subordinated Notes (3)	June 1, 2017		45,964		55,054		55,075
7.0% Junior Subordinated Debentures	October 15, 2033		50,000		55,285		55,372
Other long-term debt	(4)		-		-		1,439
Total long-term debt				$	458,232	$	603,648

(1) Represents cash collateral received from our counterparty for our interest rate swap agreement related to our 6.05% Subordinated Notes.

(2) At December 31, 2011, included in the carrying value of our 5.70% Senior Notes was $2.6 million related to the fair value of the interest rate swap associated with the notes.

(3) At June 30, 2012 and December 31, 2011, included in the carrying value of our 6.05% Subordinated Notes were $9.3 million and $8.8 million, respectively, related to the fair value of the interest rate swap associated with the notes.

(4) Represents long-term notes payable related to one of our debt fund investments. The last payment related to the notes was made in April 2012.

Interest expense related to short-term borrowings and long-term debt was $6.3 million and $12.6 million for the three and six months ended June 30, 2012, respectively, and $7.1 million and $17.8 million for the three and six months ended June 30, 2011, respectively. Interest expense is net of the cash flow impact from our interest rate swap agreements related to our 5.70% Senior Notes and 6.05% Subordinated Notes. The weighted average interest rate associated with our short-term borrowings as of June 30, 2012 was 0.14 percent.

5.70% Senior Notes

Our remaining $141.4 million 5.70% Senior Notes matured on June 1, 2012 and we repaid all outstanding principal, including unpaid and accrued interest, in cash upon maturity. In connection with the maturity, we also terminated the interest rate swap associated with these notes (see Note 8—“Derivative Financial Instruments”).

3.875% Convertible Notes

Our $250 million 3.875% Convertible Notes matured on April 15, 2011. The effective interest rate for our 3.875% Convertible Notes for the three and six months ended June 30, 2011 was 6.84 percent and 5.92 percent, respectively, and interest expense was $0.7 million and $4.2 million, respectively.

Available Lines of Credit

We have certain facilities in place to enable us to access short-term borrowings on a secured (using available-for-sale securities as collateral) and an unsecured basis. These include repurchase agreements and uncommitted federal funds lines with various financial institutions. As of June 30, 2012, we did not borrow against our uncommitted federal funds lines. We also pledge securities to the FHLB of San Francisco and the discount window at the FRB. The market value of collateral pledged to the FHLB of San Francisco (comprised primarily of U.S. agency debentures) at June 30, 2012 totaled $1.5 billion, of which the full available balance was unused and available to support additional borrowings. The market value of collateral pledged at the discount window of the FRB at June 30, 2012 totaled $635.0 million, all of which was unused and available to support additional borrowings.