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Debt
 12 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
Debt
14.
Debt

The Company’s outstanding debt consisted of the following at December 31, 2022 and 2021:

 

 

 

December 31,

 

(Dollars in thousands)

 

2022

 

 

2021 (1)

 

7.875% Subordinated Notes due 2047

 

$

—

 

 

$

126,430

 

 

(1) Amounts outstanding at December 31, 2021 represent outstanding principal of $130.0 million, net of unamortized debt costs of $3.6 million

 

Margin Borrowing Facility

The Company has available a margin borrowing facility but did not have any amounts outstanding on the margin borrowing facility as of December 31, 2022 or 2021. The borrowing rate for this facility is tied to the Fed Funds Effective rate and was approximately 5.1% and 0.8% at December 31, 2022 and 2021, respectively. This facility is 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. The Company did not have any securities that were deposited as collateral at December 31, 2022 or 2021. The amount borrowed against the margin account may fluctuate as routine investment transactions, such as dividends received, investment income received, maturities and pay-downs, impact cash balances. The margin facility contains customary events of default, including, without limitation, insolvency, failure to make required payments, failure to comply with any representations or warranties, failure to adequately assure future performance, and failure of a guarantor to perform under its guarantee.

The Company recorded interest expense related to the Margin Borrowing Facility of approximately $0.5 million for the year ended December 31, 2020. The Company did not incur any interest expense related to the Margin Borrowing Facility for the years ended December 31, 2022 or 2021.

 

7.75% Subordinated Notes due 2045

 

In August 2020, GBLI Holdings and Global Indemnity Limited redeemed the entire outstanding $100.0 million aggregate principal amount of 7.75% Subordinated Notes due 2045 (“2045 Notes”). In connection with the redemption, the Company wrote off deferred issuance costs of $3.1 million which was recognized as a loss on extinguishment of debt in its consolidated statements of operations for the year ended December 31, 2020.

 

Interest expense, including amortization of deferred issuance costs through the date of redemption, recognized on the 2045 Notes was $4.9 million for the year ended December 31, 2020. The Company did not incur any interest expense related to the 2045 Notes for the years ended December 31, 2022 and 2021.

7.875% Subordinated Notes due 2047

 

On April 15, 2022, the Company redeemed the entire $130.0 million in aggregate principal amount of the outstanding 2047 Notes plus accrued and unpaid interest on the 2047 Notes redeemed to, but not including the Redemption Date of April 15, 2022. In connection with the redemption, the Company wrote off deferred issuance costs of $3.5 million which was recognized as a loss on extinguishment of debt in its consolidated statements of operations for the year ended December 31, 2022.

 

Interest expense, including amortization of deferred issuance costs through the date of redemption, recognized on the 2047 Notes was $3.0 million, $10.4 million, and $10.4 million for the years ended December 31, 2022, 2021, and 2020, respectively.

 

In connection with the redemption of the 2047 Notes, the Supplemental Indenture and the co-obligor transaction are no longer effective. Please see Note 13 of the notes to the consolidated financial statements in Item 8 Part II of the Company’s 2021 Annual Report on Form 10-K for more information on the Supplemental Indenture and the co-obligor transaction.

 

As a result of this redemption, the Company no longer has any outstanding debt with third parties.