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Debt | 12 Months Ended
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Dec. 31, 2020
Debt Disclosure [Abstract] |
Debt | DebtThe following table sets forth information regarding the Company’s debt as of December 31, 2020 and 2019 (dollars in thousands):
|  |  |  |  |  |  |  | Principal Balance as of December 31,
Loan |  | Interest Rate as of December 31, 2020 |  | Maturity Date |  |  |  | 2020 |  | 2019
Salt Lake City Marriott Downtown at City Creek mortgage loan (1) |  | 4.25 | % |  | November 2020 |  |  |  | $ | — |  |  | $ | 53,273 |
Salt Lake City Marriott Downtown at City Creek mortgage loan |  | LIBOR + 3.25% (2) |  | January 2022 (3) |  |  |  | 47,250 |  |  | — |
Westin Washington D.C. City Center mortgage loan |  | 3.99 | % |  | January 2023 |  |  |  | 58,282 |  |  | 60,550 |
The Lodge at Sonoma Renaissance Resort & Spa mortgage loan |  | 3.96 | % |  | April 2023 |  |  |  | 26,268 |  |  | 26,963 |
Westin San Diego Downtown mortgage loan |  | 3.94 | % |  | April 2023 |  |  |  | 60,261 |  |  | 61,851 |
Courtyard New York Manhattan / Midtown East mortgage loan |  | 4.40 | % |  | August 2024 |  |  |  | 79,535 |  |  | 81,107 |
Worthington Renaissance Fort Worth Hotel mortgage loan |  | 3.66 | % |  | May 2025 |  |  |  | 79,214 |  |  | 80,904 |
JW Marriott Denver Cherry Creek mortgage loan |  | 4.33 | % |  | July 2025 |  |  |  | 60,052 |  |  | 61,253 |
Westin Boston Waterfront mortgage loan |  | 4.36 | % |  | November 2025 |  |  |  | 186,840 |  |  | 190,725 |
New Market Tax Credit loan (4) |  | 5.17 | % |  | December 2020 |  |  |  | — |  |  | 2,943 |
Unamortized debt issuance costs |  |  |  |  |  |  |  | (2,553) |  |  | (3,240) |
Total mortgage and other debt, net of unamortized debt issuance costs |  |  |  |  |  |  |  | 595,149 |  |  | 616,329 |
Unsecured term loan |  | LIBOR + 2.35% (5) |  | October 2023 |  |  |  | 50,000 |  |  | 50,000 |
Unsecured term loan |  | LIBOR + 2.35% (6) |  | July 2024 |  |  |  | 350,000 |  |  | 350,000 |
Unamortized debt issuance costs |  |  |  |  |  |  |  | (1,450) |  |  | (1,230) |
Unsecured term loans, net of unamortized debt issuance costs |  |  |  |  |  |  |  | 398,550 |  |  | 398,770 |
Senior unsecured credit facility |  | LIBOR + 2.40% (7) |  | July 2023 (8) |  |  |  | 55,000 |  |  | 75,000 |
Total debt, net of unamortized debt issuance costs |  |  |  |  |  |  |  | $ | 1,048,699 |  |  | $ | 1,090,099 |
Weighted-Average Interest Rate |  | 3.89% |  |  |  |  |  |  |  |
_____________ (1) The loan was repaid on June 25, 2020. (2) LIBOR is subject to a floor of 1.0%. (3) The loan may be extended for an additional year upon satisfaction of certain conditions. (4) Assumed in connection with the acquisition of the Hotel Palomar Phoenix on March 1, 2018. The loan matured and was repaid on December 7, 2020. (5) We are party to an interest rate swap agreement that fixes LIBOR at 2.41% through October 2023. (6) We are party to an interest rate swap agreement that fixes LIBOR at 1.70% through July 2024 for $175 million of the loan. Effective June 9, 2020, LIBOR is subject to a floor of 0.25%. (7) Effective June 9, 2020, LIBOR is subject to a floor of 0.25%. (8) The credit facility may be extended for an additional year upon the payment of applicable fees and the satisfaction of certain customary conditions. The aggregate debt maturities as of December 31, 2020 are as follows (in thousands):
2021 | $ | 15,318 |
2022 | 59,546 |
2023 | 194,650 |
2024 | 432,381 |
2025 | 295,807 |
Thereafter | — |
| $ | 997,702 |
Mortgage and Other 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, 2020, eight of our 31 hotel properties were secured by mortgage debt. On June 25, 2020, we refinanced our only significant near-term debt maturity by closing on a $48.0 million mortgage loan secured by the Salt Lake City Marriott Downtown at City Creek (“Salt Lake City Marriott”). The loan proceeds were used to repay the existing $52.5 million mortgage loan secured by the Salt Lake City Marriott that was scheduled to mature in November 2020, with the balance funded by corporate cash on hand. The new loan matures in January 2022 and has an option to extend the maturity to January 2023, subject to the satisfaction of certain conditions. The new loan bears interest at LIBOR plus 3.25%. The LIBOR rate is subject to a floor of 1.0%. The loan requires principal payments of $150 thousand per month, with the remaining principal due at maturity. Due to the impact of COVID-19, we requested relief with respect to certain conditions of the loans on our hotels syndicated through commercial mortgage backed security (“CMBS”) pools. With the exception of the mortgage loan secured by the Westin Boston Waterfront, we have not received any of the requested relief. On July 16, 2020, we entered into an amendment to the mortgage loan secured by the Westin Boston Waterfront. The amendment allows us to use the hotel’s current reserve balance for replacement of furniture and fixtures (“FF&E Reserve”) for the debt service payments due for three months beginning August 2020. We are required to replenish any funds from the FF&E Reserve used for amounts due under the loan ratably over a 12-month period ending in June 2022. Our mortgage debt contains certain property specific covenants and restrictions, including minimum debt service coverage ratios or debt yields that trigger “cash trap” provisions, as well as restrictions on incurring additional debt without lender consent. Such cash trap provisions are triggered when the hotel’s operating results fall below a certain debt service coverage ratio or debt yield. When these provisions are triggered, all of the excess cash flow generated by the hotel is deposited directly into cash management accounts for the benefit of our lenders until a specified debt service coverage ratio or debt yield is reached and maintained for a certain period of time. Such provisions do not provide the lender the right to accelerate repayment of the underlying debt. As of December 31, 2020, the debt service coverage ratios or debt yields for all of our mortgage loans were below the minimum thresholds such that the cash trap provision of each respective loan was triggered, with the exception of the mortgage loan secured by the Salt Lake City Marriott, which does not have a cash trap provision. We do not expect that such cash traps affect our ability to satisfy our short-term liquidity requirements. Senior Unsecured Credit Facility and Unsecured Term Loans We are party to credit agreements (the “Credit Agreements”) that provide for a $400 million senior unsecured credit facility (the “Revolving Credit Facility”), which matures in July 2023, a $350 million unsecured term loan maturing in July 2024 (the “Term Loan Facility”) and a $50 million unsecured term loan maturing in October 2023 (the "2023 Term Loan"). The maturity date for the Revolving Credit Facility may be extended for an additional year upon the payment of applicable fees and the satisfaction of certain customary conditions. The Credit Agreement includes the right to increase the Revolving Credit Facility and Term Loan Facility in aggregate up to $1.2 billion, subject to lender approval. The interest rate on the Revolving Credit Facility is based upon LIBOR, plus an applicable margin based upon the Company’s leverage ratio. In addition to the interest payable on amounts outstanding under the Revolving Credit Facility, we are required to pay an amount equal to 0.20% of the unused portion of the Revolving Credit Facility if the average usage is greater than 50% or 0.30% of the unused portion of the Revolving Credit Facility if the average usage is less than or equal to 50%. As of December 31, 2020, we had $55.0 million in borrowings outstanding under the Revolving Credit Facility. We incurred interest and unused fees on the Revolving Credit Facility of $4.5 million, $3.7 million and $1.2 million for the years ended December 31, 2020, 2019 and 2018, respectively. We incurred interest on the unsecured term loans of $13.4 million, $13.7 million and $10.6 million for the years ended December 31, 2020, 2019 and 2018, respectively. On June 9, 2020, we entered into amendments (the “First Amendments”) to the Credit Agreements (as amended, the “Amended Credit Agreements”). The First Amendments waive the quarterly tested financial covenants from June 9, 2020 through the first quarter of 2021, unless we elect to terminate the waiver on an earlier date (such period between June 9, 2020 and the earlier of such date of termination and the end of the first quarter of 2021, the “Covenant Relief Period”). During the Covenant Relief Period and until the date we have demonstrated compliance with the financial covenants for the fiscal quarter following the end of the Covenant Relief Period (the “Restriction Period”), the First Amendments (i) require that the net cash proceeds from certain incurrences of indebtedness, equity issuances and asset dispositions will, subject to various exceptions, be applied as a mandatory prepayment of the amounts outstanding under the Amended Credit Agreements, (ii) impose an additional covenant that we and our subsidiaries maintain minimum liquidity, defined as unrestricted cash plus available capacity on the Revolving Credit Facility, of at least $100.0 million, and (iii) impose additional negative covenants that will limit our ability to incur additional indebtedness, pay dividends and distributions (except to the extent required to maintain REIT status), repurchase shares, make prepayments of other indebtedness, make capital expenditures, conduct asset dispositions or transfers and make investments, in each case subject to various exceptions. During the Restriction Period, acquisitions of encumbered hotels are permitted, subject to a $300 million limitation, and acquisitions of unencumbered hotels are permitted subject to a partial repayment of the outstanding balance on the Revolving Credit Facility or funded with junior capital. Following the end of the Covenant Relief Period, the First Amendments modify certain financial covenants until January 1, 2022 or unless we elect to terminate the period on an earlier date (the “Ratio Adjustment Period”), as follows: •Maximum Leverage Ratio is increased from 60% to 65%; •Unencumbered Leverage Ratio is increased from 60% to 65%; and •Unencumbered Implied Debt Service Coverage Ratio may not be less than 1.00 to 1.00 for the first two testing periods in the Ratio Adjustment Period, not less than 1.10 to 1.00 for the third testing period in the Ratio Adjustment Period and not less than 1.20 to 1.00 for all testing periods thereafter. During the Covenant Relief Period and until the earlier of (i) January 1, 2022 and (ii) the date on which we have demonstrated compliance with the financial covenants, without giving effect to the modifications imposed during the Ratio Adjustment Period for two consecutive quarters following the Covenant Relief Period, the equity interests of certain of our subsidiaries that own unencumbered properties are required to be pledged to secure the obligations owed under the Amended Credit Agreements. During the Covenant Relief Period and the Ratio Adjustment Period, the First Amendments also set the applicable interest rate to LIBOR plus a margin of 2.40% for the Revolving Credit Facility and LIBOR plus a margin of 2.35% for the Term Loan Facility and 2023 Term Loan. The First Amendments also add a LIBOR floor of 0.25% to the variable interest rate calculation. On August 14, 2020, we entered into second amendments to the Amended Credit Agreements that permit us to pay dividends on preferred stock up to $17.5 million annually. On January 20, 2021, we entered into third amendments to the Amended Credit Agreements that provides for the following modifications: •Extends the Covenant Relief Period through the fourth quarter of 2021, unless we elect to terminate the period on an earlier date; •Extends of the Ratio Adjustment Period until April 1, 2023, unless we elect to terminate the period on an earlier date, and further modifies certain financial covenants, as follows: •Maximum Leverage Ratio is increased from 60% to 65%; •Unencumbered Leverage Ratio is increased from 60% to 65%; and •Unencumbered Implied Debt Service Coverage Ratio may not be less than 1.00 to 1.00 •Increases the applicable interest rate as follows: (i) for all revolving loans outstanding, LIBOR plus a margin of 2.55% per annum, and (ii) for all term loans outstanding, LIBOR plus a margin of 2.40% per annum; •Increases the minimum liquidity covenant to $125.0 million; and •Increases our ability to pay dividends on preferred stock up to $25.0 million annually.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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