Debt

The following table sets forth information regarding the Company’s debt as of March 31, 2017 (dollars in thousands):



Property	Principal Balance			Interest Rate	Maturity Date
Lexington Hotel New York	$	170,368		LIBOR + 2.25% (1)	October 2017 (2)
Salt Lake City Marriott Downtown	57,926			4.25%	November 2020
Westin Washington D.C. City Center	66,343			3.99%	January 2023
The Lodge at Sonoma, a Renaissance Resort & Spa	28,739			3.96%	April 2023
Westin San Diego	65,918			3.94%	April 2023
Courtyard Manhattan / Midtown East	85,098			4.40%	August 2024
Renaissance Worthington	85,000			3.66%	May 2025
JW Marriott Denver at Cherry Creek	64,308			4.33%	July 2025
Boston Westin	200,598			4.36%	November 2025
Unamortized debt issuance costs	(5,698		)
Total mortgage debt, net of unamortized debt issuance costs	818,600

Unsecured term loan	100,000			LIBOR + 1.45% (3)	May 2021
Unamortized debt issuance costs	(591		)
Unsecured term loan, net of unamortized debt issuance costs	99,409

Senior unsecured credit facility	—			LIBOR + 1.50%	May 2020 (4)

Total debt, net of unamortized debt issuance costs	$	918,009
Weighted-Average Interest Rate				3.80%

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(1)	The interest rate as of March 31, 2017 was 3.04%.


(2)	The loan was repaid in full on April 26, 2017.


(3)	The interest rate as of March 31, 2017 was 2.27%.


(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, 2017, nine 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. During 2016, the cash trap provision was triggered on the mortgage loan secured by the Lexington Hotel New York. As of March 31, 2017, we were in compliance with the financial covenants of our mortgage debt.

On April 26, 2017, we repaid the mortgage loan secured by the Lexington Hotel New York with proceeds from a new unsecured term loan, which is discussed further below.

Senior Unsecured Credit Facility

We are party to a senior unsecured credit facility with a capacity of $300 million. The maturity date is May 2020 and may be extended for an additional year upon the payment of applicable fees and the satisfaction of certain customary conditions. The facility also includes an accordion feature to expand up to $600 million, subject to lender consent. The interest rate on the facility is based upon LIBOR, plus an applicable margin.

The applicable margin is based upon the Company’s leverage ratio, as follows:



Leverage Ratio	Applicable Margin
Less than or equal to 35%	1.50	%
Greater than 35% but less than or equal to 45%	1.65	%
Greater than 45% but less than or equal to 50%	1.80	%
Greater than 50% but less than or equal to 55%	2.00	%
Greater than 55%	2.25	%

In addition to the interest payable on amounts outstanding under the facility, we were required to pay an amount equal to 0.20% of the unused portion of the facility if the average usage of the facility was greater than 50% or 0.30% of the unused portion of the facility if the average usage of the facility was less than or equal to 50%.

The facility also contains various corporate financial covenants. A summary of the most restrictive covenants is as follows:



		Actual at
	Covenant	March 31, 2017
Maximum leverage ratio (1)	60%	25.2%
Minimum fixed charge coverage ratio (2)	1.50x	4.65x
Minimum tangible net worth (3)	$1.91 billion	$2.55 billion
Secured recourse indebtedness	Less than 45% of Total Asset Value	26.8%

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(1)	Leverage ratio is net indebtedness, as defined in the credit agreement, divided by total asset value, defined in the credit agreement as 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, generally 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.

As of March 31, 2017, we had no borrowings outstanding under the facility and the Company's leverage ratio was 25.2%. Accordingly, interest on our borrowings under the facility, if any, will be based on LIBOR plus 150 basis points for the following quarter. We incurred interest and unused credit facility fees on the facility of $0.3 million and $0.5 million for the three months ended March 31, 2017 and 2016, respectively.

Unsecured Term Loans

We are party to a five-year $100 million unsecured term loan. The interest rate on the term loan is based on a pricing grid ranging from 145 to 220 basis points over LIBOR, based on the Company’s leverage ratio. The financial covenants of the term loan are consistent with the covenants on our senior unsecured credit facility, which are described above.

The applicable margin is based upon the Company’s leverage ratio, as follows:



Leverage Ratio	Applicable Margin
Less than or equal to 35%	1.45	%
Greater than 35% but less than or equal to 45%	1.60	%
Greater than 45% but less than or equal to 50%	1.75	%
Greater than 50% but less than or equal to 55%	1.95	%
Greater than 55%	2.20	%

As of March 31, 2017, the Company's leverage ratio was 25.2%. Accordingly, interest on our borrowings under the term loan will be based on LIBOR plus 145 basis points for the following quarter. We incurred interest on the facility of $0.6 million for the three months ended March 31, 2017. No interest was incurred for the three months ended March 31, 2016 as we did not close on the term loan until May 3, 2016.

On April 26, 2017, we closed on a new five-year $200 million unsecured term loan. The interest rate on the new term loan is based on the same pricing grid as the $100 million term loan. The financial covenants of the term loan are consistent with the covenants on our senior unsecured credit facility, which are described above. A portion of the proceeds from the new term loan was used to repay the $170.4 million mortgage loan secured by the Lexington Hotel New York.