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Debt | 12 Months Ended
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Dec. 31, 2012
Debt Disclosure [Abstract] |
Debt | Debt The following table sets forth information regarding the Company’s debt as of December 31, 2012:
Property |  | Principal Balance (In thousands) |  | Interest Rate |  | Maturity Date |  | Amortization Provisions
Courtyard Manhattan / Midtown East |  |  | $41,933 |  |  | 8.81 | % |  | October 2014 |  | 30 Years
Marriott Salt Lake City Downtown |  | 28,640 |  |  | 5.50 | % |  | January 2015 |  | 20 Years
Courtyard Manhattan / Fifth Avenue |  | 50,173 |  |  | 6.48 | % |  | June 2016 |  | 30 Years
Renaissance Worthington |  | 54,700 |  |  | 5.40 | % |  | July 2015 |  | 30 Years
Frenchman’s Reef & Morning Star Marriott Beach Resort |  | 58,690 |  |  | 5.44 | % |  | August 2015 |  | 30 Years
Marriott Los Angeles Airport |  | 82,600 |  |  | 5.30 | % |  | July 2015 |  | Interest Only
Orlando Airport Marriott |  | 57,583 |  |  | 5.68 | % |  | January 2016 |  | 30 Years
Chicago Marriott Downtown Magnificent Mile |  | 211,477 |  |  | 5.975 | % |  | April 2016 |  | 30 Years
Hilton Minneapolis |  | 96,901 |  |  | 5.464 | % |  | April 2021 |  | 25 Years
JW Marriott Denver at Cherry Creek |  | 40,761 |  |  | 6.47 | % |  | July 2015 |  | 25 Years
Lexington Hotel New York |  | 170,368 |  |  | LIBOR + 3.00% (3.214% at December 31, 2012) |  |  | March 2015 (1) |  | Interest Only
Westin Washington D.C. City Center |  | 74,000 |  |  | 3.99 | % |  | January 2023 |  | 25 Years
Debt premium (2) |  | 905 |  |  |  |  |  |  |
Total mortgage debt |  | 968,731 |  |  |  |  |  |  |
Senior unsecured credit facility |  | 20,000 |  |  | LIBOR + 1.90% (2.150% at December 31, 2012) |  |  | January 2017 (3) |  | Interest Only
Total debt |  |  | $988,731 |  |  |  |  |  |  |
Weighted-Average Interest Rate |  |  |  | 5.31% |  |  |  |
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(1) | The loan may be extended for two additional one-year terms subject to the satisfaction of certain conditions and the payment of an extension fee.
(2) | Recorded upon our assumption of the JW Marriott Denver at Cherry Creek mortgage debt in 2011.
(3) | The credit facility may be extended for an additional year upon the payment of applicable fees and the satisfaction of certain standard conditions.
The aggregate debt maturities as of December 31, 2012 are as follows (in thousands):
2013 | $ | 13,263 |
2014 | 55,271 |
2015 | 436,418 |
2016 | 309,334 |
2017 | 24,672 |
Thereafter | 149,773 |
| $ | 988,731 |
Mortgage Debt We have incurred limited recourse, property specific mortgage debt secured by certain of our hotels. In the event of default, the lender may only foreclose on the pledged assets; however, in the event of fraud, misapplication of funds or other customary recourse provisions, the lender may seek payment from us. As of December 31, 2012, 12 of our 27 hotel properties were secured by mortgage debt. Our mortgage debt contains certain property specific covenants and restrictions, including minimum debt service coverage ratios that trigger “cash trap” provisions as well as restrictions on incurring additional debt without lender consent. At December 31, 2012, we were in compliance with the financial covenants of our mortgage debt. On March 9, 2012, we closed on a limited recourse $170.4 million loan secured by a mortgage on the Lexington Hotel New York. The loan has a term of three years and bears interest at a floating rate of one-month LIBOR plus 300 basis points. The loan may be extended for two additional one-year terms subject to the satisfaction of certain terms and conditions and the payment of an extension fee. The financing also includes $25 million of corporate recourse, which will be eliminated when the hotel achieves a specified debt yield test, the planned capital renovation plan is completed and the branding requirements for the hotel are met. We were required to deposit $4 million into an escrow account upon termination of the Radisson franchise agreement and the escrow will be released upon completion of the renovation. In connection with the loan, we entered into a three-year interest rate cap agreement, which caps one-month LIBOR at 125 basis points. The cost of the interest rate cap was $0.9 million and is included in prepaid and other assets on the accompanying consolidated balance sheet. Each reporting period the carrying value is adjusted to fair market value, with the accompanying charge or credit to interest expense. As of December 31, 2012, the fair market value of the interest rate cap was $0.1 million (see Note 16). On March 23, 2012, in connection with the sale of a three-hotel portfolio, the buyer assumed $97 million of mortgage debt secured by the Renaissance Waverly and $83 million of mortgage debt secured by the Renaissance Austin. On December 20, 2012, we closed on a $74 million loan secured by a mortgage on the Westin Washington D.C. City Center. The loan has a 10-year term, bears interest at an annual fixed interest rate of 3.99% and amortizes on a 25-year schedule. Senior Unsecured Credit Facility On November 20, 2012, we amended and restated our $200.0 million unsecured credit facility, which now expires in January 2017. The maturity date of the facility may be extended for an additional year upon the payment of applicable fees and the satisfaction of certain other customary conditions. We also have the right to increase the amount of the facility up to $400 million with lender approval. Interest is paid on the periodic advances under the facility at varying rates, based upon LIBOR, plus an agreed upon additional margin amount. The applicable margin is based upon the Company’s ratio of net indebtedness to EBITDA, as follows:
Ratio of Net Indebtedness to EBITDA |  | Applicable Margin
Less than 4.00 to 1.00 |  | 1.75 | %
Greater than or equal to 4.00 to 1.00 but less than 5.00 to 1.00 |  | 1.90 | %
Greater than or equal to 5.00 to 1.00 but less than 5.50 to 1.00 |  | 2.10 | %
Greater than or equal to 5.50 to 1.00 but less than 6.00 to 1.00 |  | 2.20 | %
Greater than or equal to 6.00 to 1.00 but less than 6.50 to 1.00 |  | 2.50 | %
Greater than or equal to 6.50 to 1.00 |  | 2.75 | %
In addition to the interest payable on amounts outstanding under the facility, we are required to pay an amount equal to 0.35% of the unused portion of the facility if the unused portion of the facility is greater than 50% or 0.25% if the unused portion of the facility is less than or equal to 50%. The facility contains various corporate financial covenants. A summary of the most restrictive covenants is as follows:
|  |  | Actual at
| Covenant |  | December 31, 2012
Maximum leverage ratio(1) | 60% |  | 42.0%
Minimum fixed charge coverage ratio(2) | 1.50x |  | 2.47x
Minimum tangible net worth(3) | $1.857 billion |  | $2.216 billion
Secured recourse indebtedness(4) | Less than 50% of Total Asset Value |  | 37%
_____________________________
(1) | Leverage ratio is total indebtedness, as defined in the credit agreement and which includes our commitment on the Times Square development hotel, divided by total asset value, which is defined in the credit agreement as (a) total cash and cash equivalents plus (b) the value of our owned hotels based on hotel net operating income divided by a defined capitalization rate, and (c) the book value of the Allerton loan.
(2) | Fixed charge coverage ratio is Adjusted EBITDA, which is defined in the credit agreement as EBITDA less FF&E reserves, for the most recently ending 12 fiscal months, to fixed charges, which is defined in the credit agreement as interest expense, all regularly scheduled principal payments and payments on capitalized lease obligations, for the same most recently ending 12 fiscal month period.
(3) | Tangible net worth, as defined in the credit agreement, is (i) total gross book value of all assets, exclusive of depreciation and amortization, less intangible assets, total indebtedness, and all other liabilities, plus (ii) 75% of net proceeds from future equity issuances.
(4) | Our secured recourse indebtedness must be less than 45% of Total Asset Value, as defined in the credit agreement, after December 31, 2013.
The facility requires us to maintain a specific pool of unencumbered borrowing base properties. The unencumbered borrowing base assets must include a minimum of 5 properties with an unencumbered borrowing base value, as defined in the credit agreement, of not less than $250 million. As of December 31, 2012, we had $20.0 million in borrowings outstanding under the facility and the Company's ratio of net indebtedness to EBITDA was 4.8 x. Accordingly, interest on our borrowings under the facility will continue to be based on LIBOR plus 190 basis points for the next fiscal quarter. We incurred interest and unused credit facility fees on the facility of $2.7 million, $2.9 million and $0.7 million for the years ended December 31, 2012, 2011 and 2010, respectively. Subsequent to December 31, 2012, we drew an additional $15 million under the facility.

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- 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 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 Reference 2: 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 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 129 -Paragraph 2, 4 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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