XML 38 R25.htm IDEA: XBRL DOCUMENT
v3.3.1.900

Debt | 12 Months Ended
--- | ---
Dec. 31, 2015
Debt [Abstract] |
Debt | 17. DEBT The Company had the following debt outstanding.
DETAIL OF DEBT
(Dollars in Thousands)
Description |  | Current Outstanding Par |  |  | December 31, 2015 |  | December 31, 2014 |  | Interest Rate Terms |  | Interest (3) |  | Maturity
Contingent convertible debt: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
8.00% contingent convertible senior notes (the "8.0% Convertible Notes") |  | $ | 8,248 |  |  | $ | 8,248 |  | $ | 8,248 |  | Fixed |  |  | 8.00 | % |  | September 2018 (1)
|  |  | 8,248 |  |  |  | 8,248 |  |  | 8,248 |  |  |  |  |  |  |  |
Junior subordinated notes: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Alesco Capital Trust I |  |  | 28,125 | (2) |  |  | 12,084 |  |  | 11,499 |  | Variable |  |  | 4.61 | % |  | July 2037
Sunset Financial Statutory Trust I |  |  | 20,000 | (2) |  |  | 8,613 |  |  | 8,192 |  | Variable |  |  | 4.76 | % |  | March 2035
|  | $ | 48,125 |  |  |  | 20,697 |  |  | 19,691 |  |  |  |  |  |  |  |
Total |  |  |  |  |  | $ | 28,945 |  | $ | 27,939 |  |  |  |  |  |  |  |
(1)The holders of the 8.0% Convertible Notes may convert all or any part of the outstanding principal amount of the 8.0% Convertible Notes at any time prior to maturity into shares of the Company’s Common Stock at a conversion price of $3.00 per share, subject to customary anti-dilution adjustments.
| (2) |  | The junior subordinate d notes listed represent debt the Company owe s to the two trusts noted above. The total par amount owed by the Company to the trusts is $49,614. However, the Company own s the common stock of the trusts in a total par amount of $1,489. The Company pays interest (and at maturity, principal) to the trusts on the entire $49,614 junior notes outstanding. However, the Company receive s back from the trusts the pro rata share of interest and principal on the common stock we hol d of $1,489. Accordingly, the Company show s the net par value not held by it of $48,125 in the table above. These trusts are VIEs and the Company does not consolidate them even though the Company holds the common stock. The Company carries the common stock on its balance sheet at a value of $0.
(3)Represents the interest rate as of the last day of the reporting period. Contingent Convertible Senior Notes 10.50% Contingent Convertible Senior Notes due 2027 (the “10.5% Convertible Notes”) The Company issued $8,121 aggregate principal amount of 10.5% Convertible Notes at par d uring the second half of 2011. The 10.5% Convertible Notes were paid off in full in May 2014 during one of the available call periods. 8.0% Convertible Notes In connection with the investments by Mead Park Capital and EBC, as assignee of CBF, in September 2013, the Company issued $8,248 in aggregate principal amount of convertible senior promissory notes. The 8.0% Convertible Notes accrue 8% interest per year, payable quarterly. The 8.0% Convertible Notes mature on September 25, 2018. As required under ASC 470, the Company accounted for the 8.0% Convertible Notes as conventional convertible debt and did not allocate any amount of the proceeds to the embedded equity option. The holders of the notes may convert all or any part of the outstanding principal amount of the 8.0% Convertible Notes at any time into shares of the Company’s Common Stock at $3.00 per share conversion price, subject to customary anti-dilution adjustments. Accordingly, based on the current principal balance, the notes will be convertible into up to an aggregate of 2,749,167 shares of Common Stock. However, the 8.0% Convertible Notes have certain provisions that allow for the deferral of interest payments: (i) if dividends of less than $0.02 per share are paid on the Company’s Common Stock in the quarter prior to any interest payment date, then the Company may pay one-half of the interest in cash on such date, and the remaining one-half of the interest otherwise payable will be added to the principal amount of the convertible note then outstanding and (ii) if no dividends are paid on the Company’s Common Stock in the quarter prior to any interest payment date, then the Company may make no payment in cash on such date, and all of the interest otherwise payable on such date will be added to the principal amount of the note then outstanding. As of December 31, 2015, the Company was in compliance with the covenants of the 8.0% Convertible Notes and has paid all of the interest due there under in cash. Junior Subordinated Notes The Company assumed $49,614 aggregate principal amount of junior subordinated notes outstanding at the time of the Merger. The Company recorded the debt at fair value on the acquisition date. Any difference between the fair value of the junior subordinated notes on the Merger date and the principal amount of debt is amortized into earnings over the estimated remaining life of the underlying debt as an adjustment to interest expense. The junior subordinated notes are payable to two special purpose trusts: 1. Alesco Capital Trust I: $28,995 in aggregate principal amount issued in June 2007. The notes mature on July 30, 2037 and may be called by the Company at any time. The notes accrue interest payable quarterly at a floating interest rate equal to LIBOR plus 400 basis points per annum through July 30, 2037. All principal is due at maturity. The Alesco Capital Trust I simultaneously issued 870 shares of the Alesco Capital Trust I’s common securities to the Company for a purchase price of $870, which constitutes all of the issued and outstanding common securities of the Alesco Capital Trust I. 2. Sunset Financial Statutory Trust I (“Sunset Financial Trust”): $20,619 in aggregate principal amount issued in March 2005. The notes mature on March 30, 2035. The notes accrue interest payable quarterly at a floating rate of interest of 90-day LIBOR plus 415 basis points. All principal is due at maturity. The Sunset Financial Trust simultaneously issued 619 shares of the Sunset Financial Trust’s common securities to the Company for a purchase price of $619, which constitutes all of the issued and outstanding common securities of the Sunset Financial Trust. Alesco Capital Trust I and Sunset Financial Trust (collectively, ”the Trusts”) described above are VIEs pursuant to variable interest provisions included in FASB ASC 810 because the holders of the equity investment at risk do not have adequate decision making ability over the Trusts’ activities. The Company is not the primary beneficiary of the Trusts as it does not have the power to direct the activities of the Trusts. The Trusts are not consolidated by the Company and, therefore, the Company’s consolidated financial statements include the junior subordinated notes issued to the Trusts as a liability, and the investment in the Trusts’ common securities as an asset. The common securities were deemed to have a fair value of $0 as of the Merger Date. These are accounted for as cost method investments; therefore, the Company does not adjust the value at each reporting period. Any income generated on the common securities is recorded as interest income, a component of interest expense, net, in the consolidated statement of operations. The junior subordinated notes have several financial covenants. Since the Merger, IFMI has been in v iolation of one covenant of Alesco Capital Trust I. As a result of this violation, IFMI is prohibited from issuing additional debt that is either subordinat ed to or pari passu with Alesco Capital Trust I debt. This violation does not prohibit IFMI from issuing senior debt or the Operating LLC from issuing debt of any kind. IFMI is in compliance with all other covenants of the junior subordinated notes. The Company does not consider this violation to have a material adverse impact on its operations or on its ability to obtain financing in the future. Subordinated Notes Payable The Subordinated Notes matured and were paid in full on June 20, 2013 and bore interest at an annual rate of 12%. A portion of this interest, 9%, was payable in cash semiannually on May 1 and November 1 of each year. The remaining portion, 3%, was paid in kind at an annual rate of 3%, which was also payable semiann ually. Star Asia Manager Note Payable In connection with the Star Asia Manager Repurchase Transaction in March 2013, Star Asia Manager had paid cash of $425 and issued to Mercury a note payable in the principal amount of $725. See notes 4 and 15. Under the note payable, interest accrued on the unpaid balance of the principal amount at a floating rate equal to three-month LIBOR plus 2.75% per annum. The Star Asia Manager note payable was paid in full in October 2013. Deferred Financing The Company paid $670 of deferred financing costs during the year ended December 31, 2013 associated with the issuance of the 8.0% Convertible Notes. The Company recognized interest expense from deferred financing costs of $123, $111, and $26 for the years ended December 31, 2015, 2014, and 2013, respectively. Interest Expense, net From January 1, 20 13 to December 31, 2015, interest expense includes interest incurred in connection with the Company’s debt described in this note, the amortization of deferred financing related to the 8.0% Convertible Notes, the amortization of discount related to the convertible senior notes and the junior subordinated notes, interest income or expense related to the amounts owed to withdrawing partners of PrinceRidge (see note 18), and other miscellaneous items.

X
- References No definition available. + Details
Name: | us-gaap_DebtDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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 + Details
Name: | us-gaap_DebtDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration