Long-Term Debt

Long-term debt consists of a surplus note entered into by UPCIC with carrying amounts of $18.0 million and $18.8 million as of June 30, 2014 and December 31, 2013, respectively; a term loan with carrying amounts of $13.0 million and $18.5 million as of June 30, 2014 and December 31, 2013, respectively; and any amounts drawn upon an unsecured line of credit.

On March 29, 2013, UIH entered into a revolving loan agreement and related revolving note with Deutsche Bank Trust Company Americas (“Deutsche Bank”), amended as of May 23, 2013 (“DB Loan”). The DB Loan makes available to UIH an unsecured line of credit in an aggregate amount not to exceed $10.0 million. The DB Loan contains financial covenants and as of June 30, 2014, UIH was in compliance with all such covenants. UIH had not drawn any amounts under the unsecured line of credit as of June 30, 2014.

On May 23, 2013, UIH entered into a $20 million unsecured term loan agreement and related term note (“Term Loan”) with RenaissanceRe Ventures Ltd. (“RenRe Ventures”). The Term Loan contains financial covenants and as of June 30, 2014, UIH was in compliance with all such covenants.

The following table provides the principal amount and unamortized original issue discount of the Term Loan as of the dates presented (in thousands):


	June 30, 2014			December 31, 2013
Principal amount	$	14,000		$	20,000
Less: unamortized original issue discount		(1,031	)		(1,510	)

Term Loan, net of unamortized original issue discount	$	12,969		$	18,490

Amortization of the original issue discount is included in interest expense, a component of general and administrative expenses, in the Condensed Consolidated Statements of Income and was $230 thousand and $101 thousand for the three months ended June 30, 2014 and 2013, respectively, and $480 thousand and $101 thousand for the six months ended June 30, 2014 and 2013, respectively.

Should UIH default on either the DB Loan or the Term Loan, it will be prohibited from paying dividends to its shareholders.