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Debt
 3 Months Ended
Mar. 31, 2022
Debt Disclosure [Abstract]  
Debt Debt
The following table sets forth information regarding the Company’s debt as of March 31, 2022 and December 31, 2021 (dollars in thousands):
Principal Balance as of
LoanInterest Rate as of March 31, 2022Maturity DateMarch 31, 2022December 31, 2021
Salt Lake City Marriott Downtown at City Creek mortgage loan
LIBOR + 3.25% (1)
January 2023$43,120 $43,570 
Westin Washington, D.C. City Center mortgage loan3.99%January 202355,299 55,913 
The Lodge at Sonoma Resort mortgage loan3.96%April 202325,413 25,542 
Westin San Diego Bayview mortgage loan3.94%April 202358,166 58,600 
Courtyard New York Manhattan/Midtown East mortgage loan4.40%August 202477,445 77,882 
Worthington Renaissance Fort Worth Hotel mortgage loan3.66%May 202576,992 77,453 
Hotel Clio mortgage loan4.33%July 202558,456 58,789 
Westin Boston Seaport District mortgage loan4.36%November 2025181,679 182,755 
Unamortized debt issuance costs(1,661)(1,853)
Total mortgage debt, net of unamortized debt issuance costs574,909 578,651 
Unsecured term loan
LIBOR + 2.40% (2) (4)
October 202350,000 50,000 
Unsecured term loan
LIBOR + 2.40% (3) (4)
July 2024350,000 350,000 
Unamortized debt issuance costs(1,332)(1,428)
Unsecured term loans, net of unamortized debt issuance costs398,668 398,572 
Senior unsecured credit facility
LIBOR + 2.55% (4)
July 2023 (5)
200,000 90,000 
Total debt, net of unamortized debt issuance costs$1,173,577 $1,067,223 
Weighted-Average Interest Rate3.78% 
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(1)LIBOR is subject to a floor of 1.0%.
(2)We are party to an interest rate swap agreement that fixes LIBOR at 2.41% through October 2023.
(3)We are party to an interest rate swap agreement that fixes LIBOR at 1.70% through July 2024 for $175 million of the loan. LIBOR is subject to a floor of 0.25%.
(4)LIBOR is subject to a floor of 0.25%.
(5)The credit facility may be extended for an additional year upon the payment of applicable fees and the satisfaction of certain customary conditions.

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 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, 2022, eight of our 33 hotels were secured by mortgage debt.

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 March 31, 2022, the debt service coverage ratios or debt yields for all of our mortgage loans, except for the mortgage loan secured by the Salt Lake City Marriott Downtown at City Creek, were below the minimum thresholds such that the cash trap provision of each respective loan was triggered. As of March 31, 2022, we had $3.1 million held in cash traps, which is included within the restricted cash on the accompanying balance sheet. We do not expect that such cash traps will 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 “Facility Term Loan”) 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 interest rate on the Revolving Credit Facility and unsecured term loans 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%.

On each of June 9, 2020, August 14, 2020, January 20, 2021 and February 4, 2022, we executed amendments (the “Amendments”) to the Credit Agreements (as amended, the “Amended Credit Agreements”) for the Revolving Credit Facility and term loans. These Amendments provided for a waiver of the quarterly tested financial covenants beginning with the second quarter of 2020 through the first quarter of 2022 (the “Covenant Relief Period”) and allow for certain other modifications to the covenants thereafter through the second quarter of 2023 (the “Ratio Adjustment 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 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 $125.0 million, (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, and (iv) permit the payment of dividends on the Company's preferred stock, up to $25.0 million annually.

A summary of the most significant covenants is as follows:

ModifiedActual at
Covenant
Covenant (1)
March 31, 2022
Maximum leverage ratio (2)
60%
65%
50.0%
Minimum fixed charge coverage ratio (3)
1.50x
1.00x to 1.50x
1.68x
Secured recourse indebtedness
Less than 45% of Total Asset Value
Less than 45% of Total Asset Value
27.7%
Unencumbered leverage ratio
60.0%
65.0%
35.6%
Unencumbered implied debt service coverage ratio
1.20x
1.00x to 1.20x
1.86x
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(1)Covenant requirements during the Ratio Adjustment Period.
(2)Leverage ratio is net indebtedness, as defined in the Credit Agreements, divided by total asset value, defined in the Credit Agreements as the value of our owned hotels based on hotel net operating income divided by a defined capitalization rate.
(3)Fixed charge coverage ratio is Adjusted EBITDA, generally defined in the Credit Agreements as EBITDA less FF&E reserves, for the most recently ending 12 months, to fixed charges, which is defined in the Credit Agreements as interest expense, all regularly scheduled principal payments and payments on capitalized lease obligations, for the same most recently ending 12-month period.

During the Covenant Relief Period and the Ratio Adjustment Period, the Amendments also set the applicable interest rate to LIBOR plus a margin of 2.55% for the Revolving Credit Facility and LIBOR plus a margin of 2.40% for the Facility Term Loan and 2023 Term Loan. The Amendments also add a LIBOR floor of 0.25% to the variable interest rate calculation.

As of March 31, 2022, we had $200.0 million of borrowings outstanding under the Revolving Credit Facility. We incurred interest and unused fees on the Revolving Credit Facility of $1.3 million and $0.7 million for the three months ended March 31, 2022 and 2021, respectively. We incurred interest on the unsecured term loans of $3.6 million for each of the three months ended March 31, 2022 and 2021.