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Notes Payable

12 Months Ended

Dec. 31, 2016

Notes Payable [Abstract]

Notes Payable

Notes Payable

Notes payable consists of the following:

					December 31,
	Lender	Interest Rate	Expiration		2016				2015
					(Amounts in thousands)
Secured credit facility	Bank of America	LIBOR plus 40 basis points	December 3, 2018 (2)		$	120,000			$	120,000
Secured loan	Union Bank	LIBOR plus 40 basis points	December 3, 2017		20,000				20,000
Unsecured credit facility	Bank of America and Union Bank	(1)	December 3, 2019		180,000				150,000
Total					$	320,000			$	290,000

__________ 

⁽¹⁾  On July 2, 2013, the Company entered into an unsecured $200 million five-year revolving credit facility, which later was expanded to a borrowing capacity of $250 million. The interest rate on borrowings under the credit facility is based on the Company's debt to total capital ratio and ranges from LIBOR plus 112.5 basis points when the ratio is under 15% to LIBOR plus 162.5 basis points when the ratio is above 25%. Commitment fees for the undrawn portions of the credit facility range from 12.5 basis points when the ratio is under 15% to 22.5 basis points when the ratio is above 25%. Debt to capital ratio is expressed as a percentage of (a) consolidated debt to (b) consolidated shareholders' equity plus consolidated debt. In 2016, the interest rate was LIBOR plus 112.5 basis points on the $180 million of borrowings and 12.5 basis points on the undrawn portion of the credit facility. The interest rate was approximately 1.73% at December 31, 2016.

⁽²⁾  Effective December 28, 2016, the Company extended the maturity date from December 3, 2017 to December 3, 2018.

The $120 million credit facility is secured by municipal bonds held as collateral. The collateral requirement is calculated as the fair market value of the municipal bonds held as collateral multiplied by the advance rates, which vary based on the credit quality and duration of the assets held and range between 75% and 100% of the fair value of each bond.

The $20 million bank loan has collateral requirements similar to those of the $120 million credit facility.

The bank loan and credit facilities contain financial covenants pertaining to minimum statutory surplus, debt to capital ratio, and risk-based capital ("RBC") ratio. The Company was in compliance with all of its loan covenants at December 31, 2016.

The aggregated maturities of notes payable are as follows:

Maturity		(Amounts in thousands)
2017		$	20,000
2018		120,000
2019		180,000

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- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.19,20,22)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

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- References

No definition available.

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