(a) Notes Payable and Debt

All outstanding debt of the Company at September 30, 2013 and December 31, 2012 was issued by XLIT Ltd. (“XL-Cayman”), a 100% owned subsidiary of XL-Ireland and the only direct subsidiary thereof. XL-Ireland does not have significant assets or operations independent of XL-Cayman. XL-Cayman's outstanding debt is fully and unconditionally guaranteed by XL-Ireland. The ability of XL-Cayman, like that of the Company, to obtain funds from its subsidiaries to satisfy any of its obligations under guarantees is subject to certain contractual restrictions, applicable laws and statutory requirements of the various countries in which the Company operates, including, among others, Bermuda, the United States, Ireland, Switzerland and the United Kingdom. For details of the required statutory capital and surplus for the principal operating subsidiaries of the Company, see Item 8, Note 23, “Statutory Financial Data,” to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2012.

The Company was in compliance with all covenants by significant margins at September 30, 2013, and the Company currently remains in compliance with all covenants.

(b) Letter of Credit Facilities and Other Sources of Collateral

The Company has several letter of credit and revolving credit facilities provided on a syndicated and bilateral basis from commercial banks. These facilities are utilized primarily to support non-admitted insurance and reinsurance operations in the United States and capital requirements at Lloyd's. The Company's letter of credit facilities and revolving credit facilities at September 30, 2013 and December 31, 2012 were as follows:



Letter of Credit Summary: (U.S. dollars in thousands except percentages)	September 30, 2013 (1)			December 31, 2012 (1)
Revolving credit facility (2)	$	1,000,000		$	1,000,000
Available letter of credit facilities - commitments (3)	$	4,475,000		$	4,000,000
Available letter of credit facilities - in use	$	1,859,662		$	1,757,250
Collateralized by certain assets of the Company’s investment portfolio	74.5		%	93.3		%

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(1)	At September 30, 2013, there were seven available letter of credit facilities; at December 31, 2012, there were five available letter of credit facilities.

(2)

At September 30, 2013 and December 31, 2012, the revolving credit available under the December 9, 2011 unsecured credit agreement (the "December 2011 Unsecured Credit Agreement" and, together with the December 9, 2011 secured credit agreement (the "December 2011 Credit Agreements") was unutilized. The two credit agreements with Citicorp USA, Inc., as administrative agent and issuing lender, and the lenders party thereto, each as amended (collectively, the "2013 Credit Agreements"), provide for issuance of letters of credit and revolving credit loans up to an aggregate amount of $475 million. At September 30, 2013, $475 million of letters of credit were issued under the 2013 Credit Agreements and therefore such amount is not included here.

(3)

The Company has the option to increase the size of the facility under the March 25, 2011 secured credit agreement, as amended, by an additional $500 million, the size of the facilities under the December 2011 Credit Agreements by an additional $500 million across both such facilities and the maximum amount of the letters of credit and revolving credit loans available under the 2013 Credit Agreements, with the lender's and issuing lender's consent.

For details regarding the March 2011 Credit Agreement and the December 2011 Credit Agreements see Item 8, Note 13(b), “Notes Payable and Debt and Financing Arrangements - Letter of Credit Facilities and Other Sources of Collateral,” to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2012. For details regarding the 2013 Credit Agreements, see Item 2, “Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources,” herein.