BORROWINGS

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



	As of December 31, 2013				December 31, 2012
	Maximum Amount of Facility		Borrowings Outstanding		Borrowings Outstanding
Credit facilities:
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			10,287		10,473
Other debt			332		262
Total borrowings outstanding			$	20,619	$	20,735


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

Corporate and Real Estate Debt

TD Bank, N.A. (“TD Bank”). On November 19, 2012, the Company amended its agreement to extend the maturity of the $7.5 million 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) London Interbank Offered Rate ("LIBOR") plus 3% and to eliminate the previous floor of 6.0%. The LIBOR rate 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 of outstanding letters 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) a pledge of 2,160,671 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 December 31, 2013 on the secured credit facility and the availability on the revolving line of credit portion of the facility was $7.0 million, as reduced for letters of credit. Weighted average borrowings on the line of credit for 2013 and 2012 were $147,945 and $2.3 million, respectively, at a weighted average borrowing rate of 3.2% and 6.0%, respectively.

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 certain real estate collateral located 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 real estate, based upon the most recent appraisal delivered to the bank 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. In January 2012, the Company amended this facility to extend the maturity date from December 28, 2012 to December 1, 2013 and to add an unused annual facility fee equal to 0.25%. In November 2013, the Company further amended this facility to extend the maturity date to December 28, 2016 and increase the unused fee to 0.50%. There were no borrowings under this facility during 2013 and 2012 and the availability as of December 31, 2013 was $3.5 million.

Senior Notes

In November 2011, the Company redeemed $8.8 million of its Senior Notes for cash and modified the terms of the remaining $10.0 million of notes to reduce the interest rate to 9% from 12% and to extend the maturity date to October 2013. In December 2012, the Company modified the terms of the remaining $10.0 million 9% notes 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. As of December 31, 2013, there were 3,444,607 warrants outstanding. The Company had accounted for these warrants as a discount to the original notes. The effective interest rate for 2013 and 2012 was 9.7% and 9.3%, respectively.

Other Debt - Real Estate and Corporate

Real estate − mortgage. In August 2011, the Company obtained a $10.7 million mortgage for its hotel property in Savannah, Georgia. The 6.36% fixed rate mortgage, which matures in September 2021, requires monthly principal and interest payments of $71,331. The principal balance as of December 31, 2013 and 2012 was $10.3 million and $10.5 million, respectively.

Corporate - capital leases. In October 2013, the Company entered into a capital lease for the purchase of computer equipment at an interest rate of 6.5%. The two-year lease requires monthly payments of $16,377. The principal balance of the lease at December 31, 2013 was $309,620.

In December 2011, the Company entered into a capital lease for the purchase of computer equipment at an interest rate of 7.2%. The two-year lease requires monthly payments of $22,697. The principal balance of the lease at December 31, 2013 was $22,690.

Terminated and/or Transferred Facilities and Loans - Commercial Finance

Due to the November 2011 LEAF Transaction and resulting deconsolidation of LEAF, the Company's commercial finance debt is no longer included in the Company's consolidated financial statements.

Securitization of leases and loans. On October 28, 2011, LEAF completed a $105.0 million securitization. A subsidiary of LEAF issued eight classes of asset-backed notes at interest rates ranging from 0.4% to 5.5%. The weighted average borrowings for the period from January 1 to November 16, 2011 were $6.3 million, at a weighted average borrowing rate of 2.6% and an effective interest rate (inclusive of amortization of deferred financing costs and interest rate swaps) of 5.6%.

Guggenheim Securities LLC (“Guggenheim”). At December 31, 2010, LEAF Financial had a short-term bridge loan with Guggenheim for borrowings up to $21.8 million. The bridge facility was repaid in January 4, 2011 and terminated on February 28, 2011. Beginning in January 2011, Guggenheim provided LEAF with a revolving warehouse credit facility with availability up to $110.0 million and committed to further expand the borrowing limit to $150.0 million. LEAF, through its wholly-owned subsidiary, issued to Guggenheim, as initial purchaser, six classes of variable funding notes, with ratings ranging from “AAA” to “B”, for up to $110.0 million. Interest was calculated at a rate of 30-day LIBOR plus a margin rate applicable to each class of notes. The Company was not an obligor or a guarantor of these securities and the facility was non-recourse to the Company. The weighted average borrowings for the period from January 1 to November 16, 2011 (prior to the LEAF deconsolidation) were $56.2 million, at a weighted average borrowing rate of 4.0% and an effective interest rate of 5.1%. The weighted average borrowings on the bridge loan for 2011 was $3.9 million, at a weighted average rate of 6.8%.

Series 2010-2 term securitization. In May 2010, a subsidiary of LEAF issued $120.0 million of equipment contract-backed notes (“Series 2010-2 notes”) to provide financing for leases and loans. In the connection with the formation of LEAF in January 2011, RSO contributed the Series 2010-2 notes, along with the underlying lease portfolio, to LEAF. The weighted average borrowings for the period from January 1 to November 16, 2011 were $81.6 million at a weighted average borrowing rate of 5.3% and an effective interest rate of 8.5%.

Mortgage. In November 2007, in conjunction with the acquisition of an equipment leasing company, LEAF entered into a $1.5 million first mortgage due December 2037 on an office building. The 8% mortgage required monthly payments of principal and interest of $11,000.

Capital leases. LEAF had various capital leases for the purchase of equipment at interest rates ranging from 5.1% to 7.4%.

Debt repayments

Annual principal payments on the Company’s aggregate borrowings for the next five years ending December 31, and thereafter, are as follows (in thousands):



2014	$	387
2015	10,354
2016	224
2017	241
2018	256
Thereafter	9,157
Total	$	20,619

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 debt covenants as of December 31, 2013.