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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 DateSeptember 30, 2023December 31, 2022
Courtyard New York Manhattan/Midtown East mortgage loan4.40%August 2024$74,808 $76,153 
Worthington Renaissance Fort Worth Hotel mortgage loan3.66%May 202574,210 75,625 
Hotel Clio mortgage loan4.33%July 202556,443 57,469 
Westin Boston Seaport District mortgage loan4.36%November 2025175,164 178,487 
Unamortized debt issuance costs(711)(1,079)
Total mortgage debt, net of unamortized debt issuance costs379,914 386,655 
Unsecured term loan
 SOFR + 1.35%
January 2028500,000 500,000 
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 costs799,337 799,138 
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 RatioApplicable Margin for Revolving LoansApplicable 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
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(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,
 2023202220232022
Mortgage debt interest$4,130 $6,233 $12,331 $18,322 
Unsecured term loan interest11,019 4,104 31,867 11,568 
Credit facility interest and unused fees311 1,863 941 5,015 
Amortization of debt issuance costs and debt premium513 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