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Debt (Tables)
 6 Months Ended
Jun. 30, 2017
Debt Disclosure [Abstract]  
Summary of long term debt
The following table sets forth information regarding the Company’s debt as of June 30, 2017 (dollars in thousands):
Property
 
Principal Balance
 
Interest Rate
 
Maturity Date
Salt Lake City Marriott Downtown
 
$
57,523

 
4.25%
 
November 2020
Westin Washington D.C. City Center
 
65,847

 
3.99%
 
January 2023
The Lodge at Sonoma, a Renaissance Resort & Spa
 
28,585

 
3.96%
 
April 2023
Westin San Diego
 
65,571

 
3.94%
 
April 2023
Courtyard Manhattan / Midtown East
 
84,761

 
4.40%
 
August 2024
Renaissance Worthington
 
84,878

 
3.66%
 
May 2025
JW Marriott Denver at Cherry Creek
 
64,051

 
4.33%
 
July 2025
Boston Westin
 
199,765

 
4.36%
 
November 2025
Unamortized debt issuance costs
 
(5,183
)
 
 
 
 
Total mortgage debt, net of unamortized debt issuance costs
 
645,798

 
 
 
 
 
 
 
 
 
 
 
Unsecured term loan
 
100,000

 
LIBOR + 1.45% (1)
 
May 2021
Unsecured term loan
 
200,000

 
LIBOR + 1.45% (2)
 
April 2022
Unamortized debt issuance costs
 
(2,078
)
 
 
 
 
Unsecured term loan, net of unamortized debt issuance costs
 
297,922

 
 
 
 
 
 
 
 
 
 
 
Senior unsecured credit facility
 
—

 
LIBOR + 1.50%
 
May 2020 (3)
 
 
 
 
 
 
 
Total debt, net of unamortized debt issuance costs
 
$
943,720

 
 
 
 
Weighted-Average Interest Rate
 
 
 
3.69%
 
 

_______________________

(1)
The interest rate as of June 30, 2017 was 2.51%.
(2)
The interest rate as of June 30, 2017 was 2.50%.
(3)
The credit facility may be extended for an additional year upon the payment of applicable fees and the satisfaction of certain customary conditions.
Summary of applicable margin based upon the Company’s ratio of net indebtedness to EBITDA
The interest rate on each of the term loans is based on a pricing grid ranging from 145 to 220 basis points over LIBOR, 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
%
The interest rate on the facility is based upon LIBOR, plus an applicable margin 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
%
Summary of the most restrictive covenants for senior unsecured credit facility
The facility also contains various corporate financial covenants. A summary of the most restrictive covenants is as follows:
 
 
 
Actual at
 
Covenant
 
June 30, 2017
Maximum leverage ratio (1)
60%
 
25.0%
Minimum fixed charge coverage ratio (2)
1.50x
 
4.62x
Minimum tangible net worth (3)
$1.91 billion
 
$2.59 billion
Secured recourse indebtedness
Less than 45% of Total Asset Value
 
21.1%
_____________________________
(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.