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Debt (Tables)
 9 Months Ended
Sep. 30, 2017
Debt Disclosure [Abstract]  
Summary of long term debt
The following table sets forth information regarding the Company’s debt as of September 30, 2017 and December 31, 2016 (dollars in thousands):
 
 
 
 
 
 
Principal Balance as of
Property
 
Interest Rate
 
Maturity Date
 
September 30, 2017
 
December 31, 2016
Lexington Hotel New York
 
LIBOR + 2.25%
 
October 2017 (1)
 
$
—

 
$
170,368

Salt Lake City Marriott Downtown
 
4.25%
 
November 2020
 
57,122

 
58,331

Westin Washington D.C. City Center
 
3.99%
 
January 2023
 
65,346

 
66,848

The Lodge at Sonoma, a Renaissance Resort & Spa
 
3.96%
 
April 2023
 
28,432

 
28,896

Westin San Diego
 
3.94%
 
April 2023
 
65,220

 
66,276

Courtyard Manhattan / Midtown East
 
4.40%
 
August 2024
 
84,421

 
85,451

Renaissance Worthington
 
3.66%
 
May 2025
 
84,504

 
85,000

JW Marriott Denver at Cherry Creek
 
4.33%
 
July 2025
 
63,790

 
64,579

Boston Westin
 
4.36%
 
November 2025
 
198,922

 
201,470

Unamortized debt issuance costs
 
 
 
 
 
(4,989
)
 
(6,052
)
Total mortgage debt, net of unamortized debt issuance costs
 
 
 
 
 
642,768

 
821,167

 
 
 
 
 
 
 
 
 
Unsecured term loan
 
LIBOR + 1.45% (2)
 
May 2021
 
100,000

 
100,000

Unsecured term loan
 
LIBOR + 1.45% (3)
 
April 2022
 
200,000

 
—

Unamortized debt issuance costs
 
 
 
 
 
(1,963
)
 
(628
)
Unsecured term loan, net of unamortized debt issuance costs
 
 
 
 
 
298,037

 
99,372

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

 
—

 
 
 
 
 
 
 
 
 
Total debt, net of unamortized debt issuance costs
 
 
 
 
 
$
940,805

 
$
920,539

Weighted-Average Interest Rate
 
3.75%
 
 
 
 
 
 

_______________________

(1)
The mortgage loan was repaid on April 26, 2017.
(2)
The interest rate as of September 30, 2017 was 2.68%.
(3)
The interest rate as of September 30, 2017 was 2.69%.
(4)
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 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
%

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
%
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
 
September 30, 2017
Maximum leverage ratio (1)
60%
 
24.4%
Minimum fixed charge coverage ratio (2)
1.50x
 
4.46x
Minimum tangible net worth (3)
$1.91 billion
 
$2.57 billion
Secured recourse indebtedness
Less than 45% of Total Asset Value
 
21.2%
_____________________________
(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.