8. Debt

The Company’s outstanding debt consisted of the following at September 30, 2015 and December 31, 2014:


(Dollars in thousands)	September 30, 2015		December 31, 2014
Margin Borrowing Facilities	$	195,787	$	174,673
7.75% Subordinated Notes due 2045		96,357		—

Total	$	292,144	$	174,673

Margin Borrowing Facilities

The amount outstanding on the Company’s margin borrowing facilities was $195.8 million and $174.7 million as of September 30, 2015 and December 31, 2014, respectively. The borrowing rate for each facility is tied to LIBOR and is currently approximately 1% as of September 30, 2015. These facilities are due on demand. The borrowings are subject to maintenance margin, which is a minimum account balance that must be maintained. A decline in market conditions could require an additional deposit of collateral. As of September 30, 2015, approximately $248.5 million in securities were deposited as collateral to support the borrowing.

The Company recorded interest expense of approximately $0.5 million and $0.1 million during the quarter ended September 30, 2015 and 2014, respectively, and $1.6 million and $0.5 million during the nine months ended September 30, 2015 and 2014, respectively, related to the Margin Borrowing Facilities.

7.75% Subordinated Notes due 2045

On August 12, 2015, the Company issued $100.0 million in aggregate principal amount of its 2045 Subordinated Notes through an underwritten public offering.

The notes bear interest at an annual rate equal to 7.75%, payable quarterly in arrears on February 15, May 15, August 15, and November 15 of each year, commencing November 15, 2015. The notes mature on August 15, 2045. The Company has the right to redeem the notes in $25 increments, in whole or in part, on and after August 15, 2020, or on any interest payments date thereafter, at a redemption price equal to 100% of the principal amount of the notes being redeemed plus accrued and unpaid interest to, but not including, the date of redemption.

The notes are subordinated unsecured obligations and rank (i) senior to the Company’s existing and future capital stock, (ii) senior in right of payment to future junior subordinated debt, (iii) equally in right of payment with any unsecured, subordinated debt that the Company incurs in the future that ranks equally with the notes, and (iv) subordinate in right of payment to any of the Company’s existing and future senior debt. In addition, the notes are structurally subordinated to all existing and future indebtedness, liabilities and other obligations of the Company’s subsidiaries.

The Company incurred $3.6 million in deferred issuance costs associated with the notes, which is being amortized over the term of the notes. Interest expense, including amortization of deferred issuance costs, recognized on the notes was $1.1 million during both the quarter and nine months ended September 30, 2015.

The following tables represent the amounts recorded for the margin borrowing facilities and 7.75% subordinated notes as of September 30, 2015 and December 31, 2014:


	September 30, 2015
	Outstanding Principal		Unamortized Debt Issuance Costs			Net Carrying Amount
Margin Borrowing Facilities	$	195,787	$	—		$	195,787
7.75% Subordinated Notes due 2045		100,000		(3,643	)		96,357

	$	295,787	$	(3,643	)	$	292,144


	December 31, 2014
	Outstanding Principal		Unamortized Debt Issuance Costs		Net Carrying Amount
Margin Borrowing Facilities	$	174,673	$	—	$	174,673
7.75% Subordinated Notes due 2045		—		—		—

	$	174,673	$	—	$	174,673