Debt

The following table sets forth information regarding the Company’s debt as of March 31, 2015 (dollars in thousands):



Property	Principal Balance		Interest Rate	Maturity Date

JW Marriott Denver at Cherry Creek	$	38,354	6.47%	July 2015
Renaissance Worthington (1)	52,605		5.40%	July 2015
Frenchman’s Reef & Morning Star Marriott Beach Resort	56,306		5.44%	August 2015
Orlando Airport Marriott	55,693		5.68%	January 2016
Chicago Marriott Downtown Magnificent Mile	204,280		5.975%	April 2016
Courtyard Manhattan / Fifth Avenue	48,798		6.48%	June 2016
Lexington Hotel New York	170,368		LIBOR + 2.25% (2.422% at March 31, 2015)	October 2017 (2)
Marriott Salt Lake City Downtown	61,096		4.25%	November 2020
Hilton Minneapolis	92,337		5.464%	May 2021
Westin Washington D.C. City Center	70,168		3.99%	January 2023
The Lodge at Sonoma, a Renaissance Resort & Spa	29,959		3.96%	April 2023
Westin San Diego	68,606		3.94%	April 2023
Courtyard Manhattan / Midtown East	86,000		4.40%	August 2024
Debt premium (3)	90
Total mortgage debt	1,034,660
Senior unsecured credit facility	—		LIBOR + 1.75% (1.94% at March 31, 2015)	January 2017 (4)
Total debt	$	1,034,660
Weighted-Average Interest Rate			4.82%

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(1)	Prepaid on April 10, 2015. We entered into a new mortgage loan on April 14, 2015, as described below.


(2)	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.


(3)	Recorded upon our assumption of the JW Marriott Denver at Cherry Creek mortgage debt.


(4)	The credit facility may be extended for an additional year upon the payment of applicable fees and the satisfaction of certain customary conditions.

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 secured assets; however, in the event of fraud, misapplication of funds or other customary recourse provisions, the lender may seek payment from us. As of March 31, 2015, 13 of our 28 hotels 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. As of March 31, 2015, we are in compliance with the financial covenants of our mortgage debt.

We prepaid the $52.6 million mortgage loan secured by the Renaissance Worthington on April 10, 2015. On April 14, 2015, we entered into a new $85 million mortgage loan secured by the Renaissance Worthington. The new loan matures in May 2025 and bears interest at a fixed rate of 3.66%. The new loan is interest-only for the first two years, after which principal will amortize on a 30-year schedule.

We provided notice to the lender in March 2015 that we intend to prepay the mortgage loan secured by the Frenchman's Reef & Morning Star Beach Resort on May 11, 2015.

Senior Unsecured Credit Facility

We are party to a $200 million unsecured credit facility, which 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	March 31, 2015
Maximum leverage ratio (1)	60%	34.0%
Minimum fixed charge coverage ratio (2)	1.50x	3.1x
Minimum tangible net worth (3)	$1.910 billion	$2.471 billion
Secured recourse indebtedness	Less than 45% of Total Asset Value	34.0%

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(1)	Leverage ratio is total indebtedness, as defined in the credit agreement, divided by total asset value, defined in the credit agreement as a) total cash and cash equivalents and b) the value of our owned hotels based on hotel net operating income divided by a defined capitalization rate.


(2)	Fixed charge coverage ratio is Adjusted EBITDA, defined in the credit agreement as EBITDA less FF&E reserves, for the most recently ending 12 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-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.

The facility requires us to maintain a specific pool of unencumbered borrowing base properties. The unencumbered borrowing base assets must include a minimum of five properties with an unencumbered borrowing base value, as defined in the credit agreement, of not less than $250 million. As of March 31, 2015, the unencumbered borrowing base included five properties with a borrowing base value of $335 million.

As of March 31, 2015, we had no borrowings outstanding under the facility and the Company's ratio of net indebtedness to EBITDA was 3.7x. Accordingly, interest on our future borrowings, if any, under the facility will be based on LIBOR plus 175 basis points for the next quarter. We incurred interest and unused credit facility fees on the facility of $0.2 million for each of the three months ended March 31, 2015 and 2014. Subsequent to March 31, 2015, we borrowed $45 million under the facility in order to repay the mortgage loan secured by the Renaissance Worthington, which was repaid upon the closing of the new mortgage loan.