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Debt
 6 Months Ended
Jun. 30, 2024
Debt Disclosure [Abstract]  
Debt Debt
The following table sets forth information regarding the Company’s debt (dollars in thousands):
Principal Balance as of
Loan
Interest Rate as of June 30, 2024
Maturity DateJune 30, 2024December 31, 2023
Courtyard New York Manhattan/Midtown East mortgage loan4.40%August 2024$73,416 $74,346 
Worthington Renaissance Fort Worth Hotel mortgage loan3.66%May 202572,756 73,727 
Hotel Clio mortgage loan4.33%July 202555,382 56,091 
Westin Boston Seaport District mortgage loan4.36%November 2025171,731 174,025 
Unsecured term loan
 SOFR + 1.35% (1)
January 2028500,000 500,000 
Unsecured term loan
SOFR + 1.35% (1)
January 2025 (2)
300,000 300,000 
Senior unsecured credit facility
SOFR + 1.40%
September 2026 (2)
— — 
Total debt1,173,285 1,178,189 
Unamortized debt issuance costs (3)
(806)(1,184)
Debt, net of unamortized debt issuance costs$1,172,479 $1,177,005 
Weighted-Average Interest Rate (4)
5.22% 
_______________________
(1)Interest rate as of June 30, 2024 was 6.80%, which excludes the effect of interest rate swaps.
(2)Maturity date may be extended for an additional year upon the payment of applicable fees and the satisfaction of certain customary conditions.
(3)Excludes debt issuance costs related to our senior unsecured credit facility, which are included within Prepaid and Other Assets on the accompanying consolidated balance sheet.
(4)Weighted-average interest rate as of June 30, 2024 includes the effect of interest rate swaps. See Note 5 for additional disclosures on 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 June 30, 2024, four of our 36 hotels were secured by mortgage debt. We have one mortgage loan that matures on August 6, 2024, which has a principal balance of $73.4 million as of June 30, 2024. We intend to repay this mortgage loan using cash on hand. We intend to refinance the other mortgage loans that mature in 2025 as they approach their respective maturity dates. In the case that refinancing options are not attractive, we may repay such mortgage loans using our senior unsecured revolving credit facility.

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. We had no cash trapped as of June 30, 2024 and December 31, 2023.

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 intend to exercise our right to extend our $300 million term loan an additional year. 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 June 30, 2024
Maximum leverage ratio (1)
60%
29.0%
Minimum fixed charge coverage ratio (2)
1.50x
2.92x
Secured recourse indebtedness
Less than 45% of Total Asset Value
11.3%
Maximum unencumbered leverage ratio
60%
30.4%
Minimum unencumbered implied debt service coverage ratio
1.20x
2.49x
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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 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.

The components of the Company's interest expense consisted of the following (in thousands):

Three Months Ended June 30,Six Months Ended June 30,
 2024202320242023
Mortgage debt interest$4,009 $4,111 $8,044 $8,202 
Unsecured term loan interest11,368 10,608 22,755 20,848 
Credit facility interest and unused fees312 317 623 630 
Amortization of debt issuance costs and debt premium513 512 1,026 1,026 
Interest rate swap mark-to-market— 19 — 2,033 
$16,202 $15,567 $32,448 $32,739