Mercury Insurance 2015 Annual Report Download - page 61

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49
The Company’s common stock allocation is intended to enhance the return of and provide diversification for the total
portfolio. At December 31, 2015, 9.3% of the total investment portfolio at fair value was held in equity securities, compared to
12.1% at December 31, 2014.
The following table presents the equity security portfolio by industry sector at December 31, 2015 and 2014:
December 31,
2015 2014
Cost Fair Value Cost Fair Value
(Amounts in thousands)
Equity securities:
Basic materials $ 17,094 $ 16,027 $ 18,707 $ 20,079
Communications 22,226 21,759 6,255 7,103
Consumer—cyclical 34,707 38,378 29,919 32,368
Consumer—non-cyclical 31,694 32,480 9,502 8,931
Energy 38,560 34,895 126,052 135,316
Financial 40,730 41,974 40,439 42,660
Funds 19,017 16,676 10,000 11,719
Industrial 17,261 17,110 24,327 19,693
Technology 19,105 18,397 17,214 18,688
Utilities 73,134 77,666 105,436 116,323
$ 313,528 $ 315,362 $ 387,851 $ 412,880
D. Debt
Notes payable consists of the following:
December 31,
Lender Interest Rate Expiration 2015 2014
(Amounts in thousands)
Secured credit facility Bank of America LIBOR plus 40 basis points December 3, 2017 (2) $ 120,000 $ 120,000
Secured loan Union Bank LIBOR plus 40 basis points December 3, 2017 (3) 20,000 20,000
Unsecured credit
facility
Bank of America
and Union Bank (1) December 3, 2019 (4) 150,000 150,000
Total $ 290,000 $ 290,000
__________
(1) On July 2, 2013, the Company entered into an unsecured $200 million five-year revolving credit facility. 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 2015, the interest rate was LIBOR plus 112.5 basis points on
the $150 million of borrowings and 12.5 basis points on the undrawn portion of the credit facility. The interest rate was
approximately 1.53% at December 31, 2015.
(2) Effective December 3, 2014, the Company extended the maturity date from July 31, 2016 to December 3, 2017.
(3) Effective December 12, 2014, the Company extended the maturity date from January 2, 2015 to December 3, 2017.
(4) Effective December 3, 2014, the Company extended the maturity date from June 30, 2018 to December 3, 2019, and
expanded the borrowing capacity from $200 million to $250 million.
The bank loan and credit facilities contain financial covenants pertaining to minimum statutory surplus, debt to capital ratio,
and RBC ratio. The Company was in compliance with all of its loan covenants at December 31, 2015.
For a further discussion, see Note 7. Notes Payable, of the Notes to Consolidated Financial Statements in "Item 8. Financial
Statements and Supplementary Data."