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Debt | 6 Months Ended
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Jun. 30, 2025
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 |  | Maturity Date |  | June 30, 2025 |  | December 31, 2024
Worthington Renaissance Fort Worth Hotel mortgage loan |  | 3.66% |  | May 2025 |  | $ | — |  |  | $ | 71,766 |
Hotel Clio mortgage loan |  | 4.33% |  | July 2025 |  | 53,910 |  |  | 54,657 |
Westin Boston Seaport District mortgage loan |  | 4.36% |  | November 2025 |  | 166,966 |  |  | 169,385 |
Unsecured term loan |  | SOFR + 1.35% (1) |  | January 2028 |  | 500,000 |  |  | 500,000 |
Unsecured term loan |  | SOFR + 1.35% (2) |  | January 2026 |  | 300,000 |  |  | 300,000 |
Senior unsecured credit facility |  | SOFR + 1.40% |  | September 2026 (3) |  | — |  |  | — |
Total debt |  |  |  |  |  | 1,020,876 |  |  | 1,095,808 |
Unamortized debt issuance costs (4) |  |  |  |  |  | (556) |  |  | (514) |
Debt, net of unamortized debt issuance costs |  |  |  |  |  | $ | 1,020,320 |  |  | $ | 1,095,294 |
Weighted-Average Interest Rate (5) |  | 5.17% |  |  |  |  |  |
_______________________ (1)Interest rate as of June 30, 2025 was 5.12%, which includes the effect of interest rate swaps. (2)Interest rate as of June 30, 2025 was 5.74%. (3)Maturity date may be extended for an additional year upon the payment of applicable fees and the satisfaction of certain customary conditions. (4)Excludes debt issuance costs related to our senior unsecured credit facility, which are included within Prepaid and Other Assets on the accompanying consolidated balance sheets. (5)Includes the effect of interest rate swaps. See Note 6 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. On May 6, 2025, we repaid the Worthington Renaissance Fort Worth Hotel mortgage loan using cash on hand. As of June 30, 2025, two of our 36 hotels were secured by mortgage loans which mature in July and November 2025. On July 2, 2025, the Company drew $60.0 million on its existing revolving credit facility, the proceeds from which were used to repay the Hotel Clio mortgage loan on its maturity date of July 3, 2025. The $60.0 million drawn on the existing revolving credit facility was repaid on July 22, 2025. 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 with the right to accelerate repayment of the underlying debt. We had no cash traps in effect as of June 30, 2025 and December 31, 2024. Senior Unsecured Credit Facility and Unsecured Term Loans As of June 30, 2025, we were party to a Sixth Amended and Restated Credit Agreement (the “Credit Agreement”) that provided us with a $400.0 million senior unsecured revolving credit facility and two term loan facilities in the aggregate amount of $800.0 million. The revolving credit facility was scheduled to mature on September 27, 2026, which we could extend for an additional year upon the payment of applicable fees and satisfaction of certain standard conditions. The term loan facilities consisted of a $500.0 million term loan maturing on January 3, 2028 and a $300.0 million term loan maturing January 3, 2026. We had the right to increase the aggregate amount of the facilities to $1.4 billion upon the satisfaction of certain standard conditions. Subsequent to the end of the quarter, on July 22, 2025, we entered into the Seventh Amended and Restated Credit Agreement (the “Amended Credit Facility”). The Amended Credit Facility increased the size of the Company’s existing credit facility from $1.2 billion to $1.5 billion and extended its maturity schedule. The Amended Credit Facility provides for a $400.0 million revolving credit facility (the “Revolving Credit Facility”) and three term loan facilities in the aggregate amount of $1.1 billion. The Revolving Credit Facility matures on January 22, 2030. The term loan facilities consist of a $500.0 million term loan that matures on January 3, 2028 (the “Term 1 Loan”), a $300.0 million term loan that matures January 22, 2030 (the “Term 2 Loan”) and a $300.0 million term loan that matures on January 22, 2029 (the “Term 3 Loan”). The maturity date of the Revolving Credit Facility, Term 1 Loan and Term 3 Loan may be extended for two additional six-month periods upon the payment of applicable fees and satisfaction of certain standard conditions. The Company also has the right to increase the aggregate capacity of the Amended Credit Facility to $1.8 billion upon the satisfaction of certain standard conditions. The $300.0 million upsizing of the Amended Credit Facility fully funds the repayment of the Company’s three mortgage loans that matured or will mature in 2025. The mortgage loans secured by the Worthington Renaissance Fort Worth Hotel and the Hotel Clio, which together had a principal balance totaling approximately $125.0 million, were repaid on their respective maturity dates in May 2025 and July 2025 prior to the closing of the Amended Credit Facility. The Company intends to prepay the mortgage loan secured by the Westin Boston Seaport District in September 2025. Following this repayment, the Company will have no debt maturities until January 2028 and its portfolio will be fully unencumbered by secured debt. As of June 30, 2025, interest was 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 and Amended Credit Facility, 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 and Amended Credit Facility contain various financial covenants. These financial covenants are not changed or waived by the Amended Credit Facility. A summary of the most significant covenants is as follows:
|  |  |  | Actual at
| Covenant |  |  | June 30, 2025
Maximum leverage ratio (1) | 60% |  |  | 25.7%
Minimum fixed charge coverage ratio (2) | 1.50x |  |  | 3.14x
Secured recourse indebtedness | Less than 45% of Total Asset Value |  |  | 6.5%
Maximum unencumbered leverage ratio | 60% |  |  | 25.5%
Minimum unencumbered implied debt service coverage ratio | 1.20x |  |  | 2.94x
_____________________________ (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 recent trailing 12 month period, 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 12 month period. The components of the Company's interest expense consist of the following (in thousands):
|  | Three Months Ended June 30, |  | Six Months Ended June 30,
|  | 2025 |  | 2024 |  | 2025 |  | 2024
Unsecured term loan interest |  | $ | 10,868 |  |  | $ | 11,368 |  |  | $ | 21,630 |  |  | $ | 22,755 |
Mortgage debt interest |  | 2,699 |  |  | 4,009 |  |  | 5,791 |  |  | 8,044 |
Credit facility interest and unused fees |  | 312 |  |  | 312 |  |  | 620 |  |  | 623 |
Amortization of debt issuance costs |  | 521 |  |  | 513 |  |  | 1,056 |  |  | 1,026 |
Finance lease expense(1) |  | 468 |  |  | — |  |  | $ | 929 |  |  | $ | — |
|  | $ | 14,868 |  |  | $ | 16,202 |  |  | $ | 30,026 |  |  | $ | 32,448 |
_____________ (1)In October 2024, we extended the term on one of our ground leases, and, as a result, the lease classification changed from an operating lease to a finance lease.

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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://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 8A -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-8A Reference 2: http://www.xbrl.org/2003/role/disclosureRef 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