BORROWINGS

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



	As of March 31, 2014				December 31, 2013
	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			10,236		10,287
Other debt			265		332
Total borrowings outstanding			$	20,501	$	20,619


(1)	The amount of the facility as shown has been reduced for outstanding letters of credit of $503,000 at March 31, 2014.

Corporate and Real Estate Debt

TD Bank, N.A. (“TD Bank”). As of March 31, 2014, the terms of the Company's line of credit with TD Bank allowed for borrowings up to $7.5 million at an interest rate of (a) the prime rate of interest plus 2.25% or (b) London Interbank Offered Rate ("LIBOR") plus 3%. The LIBOR rate varies from one to six months depending upon the period of the borrowing. 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.

In April 2014, the Company amended the TD facility to (i) extend the maturity date to the earlier of (a) the expiration of its management agreement with RSO or (b) December 31, 2017, (ii) increase the maximum revolving credit amount to $11.5 million provided that the Company maintains an aggregate value of pledged securities of $6.0 million and (iii) require that the Company have no cash advances outstanding for thirty consecutive days during each one-year period beginning on April 25, 2014.

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 collateralized debt and loan obligation 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.

There were no borrowings outstanding as of March 31, 2014 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 the three months ended March 31, 2014 and 2013 were $0 and $600,000, respectively, at a weighted average borrowing rate of 0.0% and 3.2%, 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. The loan has 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 the three months ended March 31, 2014 and 2013 and the availability as of March 31, 2014 was $3.5 million.

Senior Notes

The Company's $10.0 million of 9% notes mature on March 31, 2015. The notes were issued with detachable 5-year warrants to purchase 3,690,195 shares of common stock, of which 3,444,607 were outstanding as of March 31, 2014. The effective interest rate for the three months ended March 31, 2014 and 2013 was 9.4% and 9.8%, respectively.

Debt repayments

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



2015	$	10,386
2016	294
2017	229
2018	244
2019	260
Thereafter	9,088
Total	$	20,501

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 March 31, 2014.