XML 21 R12.htm IDEA: XBRL DOCUMENT
v3.23.3

Debt | 9 Months Ended
--- | ---
Sep. 30, 2023
Debt Disclosure [Abstract] |
Debt | Debt The following table sets forth information regarding the Company’s debt as of September 30, 2023 and December 31, 2022 (dollars in thousands):
|  |  |  |  |  | Principal Balance as of
Loan |  | Interest Rate as of September 30, 2023 |  | Maturity Date |  | September 30, 2023 |  | December 31, 2022
Courtyard New York Manhattan/Midtown East mortgage loan |  | 4.40% |  | August 2024 |  | $ | 74,808 |  |  | $ | 76,153 |
Worthington Renaissance Fort Worth Hotel mortgage loan |  | 3.66% |  | May 2025 |  | 74,210 |  |  | 75,625 |
Hotel Clio mortgage loan |  | 4.33% |  | July 2025 |  | 56,443 |  |  | 57,469 |
Westin Boston Seaport District mortgage loan |  | 4.36% |  | November 2025 |  | 175,164 |  |  | 178,487 |
Unamortized debt issuance costs |  |  |  |  |  | (711) |  |  | (1,079) |
Total mortgage debt, net of unamortized debt issuance costs |  |  |  |  |  | 379,914 |  |  | 386,655 |
Unsecured term loan |  | SOFR + 1.35% |  | January 2028 |  | 500,000 |  |  | 500,000 |
Unsecured term loan |  | SOFR + 1.35% |  | January 2025 (1) |  | 300,000 |  |  | 300,000 |
Unamortized debt issuance costs |  |  |  |  |  | (663) |  |  | (862) |
Unsecured term loans, net of unamortized debt issuance costs |  |  |  |  |  | 799,337 |  |  | 799,138 |
Senior unsecured credit facility |  | SOFR + 1.40% |  | September 2026 (1) |  | — |  |  | — |
Total debt, net of unamortized debt issuance costs |  |  |  |  |  | $ | 1,179,251 |  |  | $ | 1,185,793 |
Weighted-Average Interest Rate (2) |  | 5.07% |  |  |  |  |  |
_______________________ (1)Maturity date may be extended for an additional year upon the payment of applicable fees and the satisfaction of certain customary conditions. (2)Weighted-average interest rate as of September 30, 2023 includes effect of interest rate swaps. 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 September 30, 2023, four of our 36 hotels were secured by mortgage debt. We have one mortgage loan that matures within one year, which has a principal balance of $74.8 million as of September 30, 2023. We intend to repay this mortgage loan using cash flow from operations or available capacity on our senior unsecured credit facility, which is sufficient to meet the principal due within the next twelve months. 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, 2022, we had $2.9 million held in cash traps, which is included within the restricted cash on the accompanying consolidated balance sheet. As of September 30, 2023, all cash traps had been released. Senior Unsecured Credit Facility and Unsecured Term Loans We are party to a Sixth Amended and Restated Credit Agreement (the “Credit Agreement”) that provides us with a $400 million senior unsecured revolving credit facility and two term loan facilities in the aggregate amount of $800 million. The revolving credit facility matures on September 27, 2026, which we may extend for an additional year upon the payment of applicable fees and satisfaction of certain standard conditions. The term loan facilities consist of a $500 million term loan that matures on January 3, 2028 and a $300 million term loan that matures January 3, 2025. The maturity date of the $300 million term loan may be extended for an additional year upon the payment of applicable fees and satisfaction of certain standard conditions. We have the right to increase the aggregate amount of the facilities to $1.4 billion upon the satisfaction of certain standard conditions. Interest is paid on the periodic advances on the revolving credit facility and amounts outstanding on the term loans at varying rates, based upon the adjusted Secured Overnight Financing Rate (“SOFR”), as defined in the Credit Agreement, plus an applicable margin. The applicable margin is based upon our leverage ratio, as follows:
Leverage Ratio |  | Applicable Margin for Revolving Loans |  | Applicable Margin for Term Loans
Less than 30% |  | 1.40% |  | 1.35%
Greater than or equal to 30% but less than 35% |  | 1.45% |  | 1.40%
Greater than or equal to 35% but less than 40% |  | 1.50% |  | 1.45%
Greater than or equal to 40% but less than 45% |  | 1.60% |  | 1.55%
Greater than or equal to 45% but less than 50% |  | 1.80% |  | 1.75%
Greater than or equal to 50% but less than 55% |  | 1.95% |  | 1.85%
Greater than or equal to 55% |  | 2.25% |  | 2.20%
The Credit Agreement contains various financial covenants. A summary of the most significant covenants is as follows:
|  |  |  | Actual at
| Covenant |  |  | September 30, 2023
Maximum leverage ratio (1) | 60% |  |  | 28.3%
Minimum fixed charge coverage ratio (2) | 1.50x |  |  | 3.08x
Secured recourse indebtedness | Less than 45% of Total Asset Value |  |  | 11.0%
Unencumbered leverage ratio | 60% |  |  | 28.4%
Unencumbered implied debt service coverage ratio | 1.20x |  |  | 2.65x
_____________________________ (1)Leverage ratio is net indebtedness, as defined in the Credit Agreement, 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. (2)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 Agreement as interest expense, all regularly scheduled principal payments and payments on capitalized lease obligations, for the same most recently ending 12-month period. The components of the Company's interest expense consisted of the following (in thousands):
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2023 |  | 2022 |  | 2023 |  | 2022
Mortgage debt interest |  | $ | 4,130 |  |  | $ | 6,233 |  |  | $ | 12,331 |  |  | $ | 18,322 |
Unsecured term loan interest |  | 11,019 |  |  | 4,104 |  |  | 31,867 |  |  | 11,568 |
Credit facility interest and unused fees |  | 311 |  |  | 1,863 |  |  | 941 |  |  | 5,015 |
Amortization of debt issuance costs and debt premium |  | 513 |  |  | 652 |  |  | 1,540 |  |  | 1,963 |
Interest rate swap mark-to-market |  | — |  |  | (3,780) |  |  | 2,033 |  |  | (14,002) |
|  | $ | 15,973 |  |  | $ | 9,072 |  |  | $ | 48,712 |  |  | $ | 22,866 |

X
- References No definition available. + Details
Name: | us-gaap_DebtDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(c)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 470 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//470/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1B -Subparagraph (i) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1C -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1C -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1E -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1I -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1I -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1I -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I + Details
Name: | us-gaap_DebtDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration