BORROWINGS

The credit facilities and other debt of the Company and related borrowings outstanding are as follows (in thousands):



	As of September 30, 2013				December 31, 2012
	Maximum Amount of Facility		Borrowings Outstanding		Borrowings Outstanding
Credit facilities:					(Restated)
TD Bank – secured revolving credit facility ⁽¹⁾	$	6,997	$	—	$	—
Republic Bank – secured revolving credit facility	3,500		—		—
			—		—
Other Debt:
Senior Notes			10,000		10,000
Mortgage debt			10,335		10,473
Other debt			45		567
Total borrowings			$	20,380	$	21,040


(1)	The amount of the facility as shown has been reduced for the outstanding letter of credit of $503,000 at September 30, 2013 and December 31, 2012.

Credit Facilities

TD Bank, N.A. (“TD Bank”). On November 19, 2012, the Company amended its agreement with TD Bank to extend the maturity of the TD Bank facility to December 31, 2014, to set the interest rate on borrowings as either (a) the prime rate of interest plus 2.25% or (b) the London Interbank Offered Rate ("LIBOR") plus 3% and to eliminate the previous floor of 6.0%. The LIBOR rate used varies from one to six months, depending upon the period of the borrowing, at the Company's election. The Company is charged an annual fee of 0.5% on the unused facility amount as well as a 5.25% fee on the $503,000 outstanding letter of credit.

Borrowings are secured by a first priority security interest in certain of the Company's assets and the guarantees of certain subsidiaries, including (i) the present and future fees and investment income earned in connection with the management of, and investments in, sponsored CDO issuers, (ii) a pledge of 18,972 shares of TBBK common stock, and (iii) the pledge of 2,080,482 shares of RSO common stock. Availability under the facility is limited to the lesser of (a) 75% of the net present value of future RSO base management fees to be earned or (b) the maximum revolving credit facility amount.

There were no borrowings outstanding as of or during the three months ended September 30, 2013 and September 30, 2012 on the secured credit facility and the availability on the facility was $7.0 million, as reduced for outstanding letters of credit at September 30, 2013. Weighted average borrowings on the line of credit for the nine months ended September 30, 2013 and September 30, 2012 were $198,000 and $3.1 million at weighted average borrowing rates of 2.4% and 6.0%.

Republic First Bank (“Republic Bank”). In February 2011, the Company entered into a $3.5 million revolving credit facility with Republic Bank. The facility bears interest at the prime rate of interest plus 1% with a floor of 4.5%. The loan is secured by a pledge of 700,000 shares of RSO stock and a first priority security interest in the office building the Company owns in Philadelphia, Pennsylvania. Availability under this facility is limited to the lesser of (a) the sum of (i) 25% of the appraised value of the office building, based upon the most recent appraisal and (ii) 100% of the cash and 75% of the market value of the pledged RSO shares held in the pledged account; and (b) 100% of the cash and 100% of the market value of the pledged RSO shares held in the pledged account. The Company also is charged an unused annual facility fee equal to 0.25%. In October 2012, the Company amended this facility to extend the maturity date to December 28, 2014. There were no borrowings under this facility during the three and nine months ended September 30, 2013 and 2012 and the availability as of September 30, 2013 was $3.5 million. In November 2013, the Company amended the facility with Republic to extend the maturity until December 28, 2016 and increase the unused fee to 0.50%.

Senior Notes

In December 2012, the Company modified the terms of $10.0 million of its 9% Senior Notes that remain outstanding (following the partial repayment referred to below) to extend the maturity date from October 2013 to March 31, 2015. In connection with the modification, the Company paid a modification incentive payment equal to 1.0% of the aggregate principal amount of each note. The detachable 5-year warrants to purchase 3,690,195 shares of common stock issued with the original notes were unaffected and, as of September 30, 2013, 3,444,607 remain outstanding. The Company had accounted for these warrants as a discount to the original notes. The effective interest rates for the three and nine months ended September 30, 2013 were 9.7% and 9.8%, respectively. The effective interest rate for the three and nine months ended September 30, 2012 were 9.3% and 9.3%, respectively.

Per the Senior Note agreement, the Company was restricted from paying dividends in excess of $0.03 per share. During the quarter ended September 30, 2013, the holders of the senior notes consented to remove the restriction and the Company increased its quarterly dividend to $0.04 per share.

Debt repayments

Annual principal payments on the Company’s aggregate borrowings for the next five succeeding annual periods ending September 30, and thereafter, are as follows (in thousands):



2014	$	240
2015	10,208
2016	220
2017	237
2018	252
Thereafter	9,223
	$	20,380

Covenants

The TD Bank credit facility is subject to certain financial covenants, which are customary for the type and size of the facility, including debt service coverage and debt to equity ratios. The debt to equity ratio restricts the amount of recourse debt the Company can incur based on a ratio of recourse debt to net worth.

The mortgage on the Company's hotel property contains financial covenants related to the net worth and liquid assets of the Company. Although non-recourse in nature, the loan is subject to limited standard exceptions (or “carveouts”) which the Company has guaranteed. These carveouts will expire as the loan is paid down over the next ten years. The Company has control over the operations of the underlying property, which mitigates the potential risk associated with these carveouts and, accordingly, no liabilities for these obligations have been recorded in the consolidated financial statements. To date, the Company has not been required to make any carveout payments.

The Company was in compliance with all of its financial debt covenants as of September 30, 2013.