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Debt
 9 Months Ended
Sep. 30, 2022
Debt Disclosure [Abstract]  
Debt Debt
 
The Company's debt consisted of the following (in thousands):
September 30, 2022December 31, 2021
Senior Notes, net$988,716 $986,942 
Revolver— 200,000 
Term Loans, net816,316 815,004 
Mortgage loans, net407,720 407,492 
Debt, net$2,212,752 $2,409,438 

Senior Notes

As of September 30, 2022 and December 31, 2021, respectively, the Company's Senior Notes (collectively, the "Senior Notes") consisted of the following (dollars in thousands):
Carrying Value at
Interest RateMaturity DateSeptember 30, 2022December 31, 2021
Senior Notes due 2029 4.00%September 2029$500,000 $500,000 
Senior Notes due 2026 3.75%July 2026500,000 500,000 
1,000,000 1,000,000 
Deferred financing costs, net(11,284)(13,058)
Total senior notes, net$988,716 $986,942 
The indentures governing the Senior Notes contain customary covenants that limit the Operating Partnership’s ability and, in certain instances, the ability of its subsidiaries, to incur additional debt, create liens on assets, make distributions and pay dividends, make certain types of investments, issue guarantees of indebtedness, and make certain restricted payments. These limitations are subject to a number of exceptions and qualifications set forth in the indentures.
A summary of the various restrictive covenants for the Senior Notes are as follows:
CovenantCompliance
Maintenance Covenant
Unencumbered Asset to Unencumbered Debt Ratio
> 150.0%
Yes
Incurrence Covenants
Consolidated Indebtedness less than Adjusted Total Assets
< .65x
Yes
Consolidated Secured Indebtedness less than Adjusted Total Assets
< .45x
Yes
Interest Coverage Ratio
> 1.5x
Yes

As of September 30, 2022 and December 31, 2021, the Company was in compliance with all covenants associated with the Senior Notes.

Revolver and Term Loans
 
The Company has the following credit agreements in place:

•$600.0 million revolving credit facility with a scheduled maturity date of May 18, 2024 and a one year extension option if certain conditions are satisfied (the "Revolver");
•$400.0 million term loan with a scheduled maturity date (excluding the available extension option) of January 25, 2023 (the "$400 Million Term Loan Maturing 2023");
•$225.0 million term loan with a scheduled maturity date (excluding the available extension option) of January 25, 2023 (the "$225 Million Term Loan Maturing 2023");
•$150.0 million term loan with a scheduled maturity date (excluding the available extension option) of June 10, 2023 (the "$150 Million Term Loan Maturing 2023"); and
•$400.0 million term loan with a scheduled maturity date of May 18, 2025 (the "$400 Million Term Loan Maturing 2025").
The $400 Million Term Loan Maturing 2023, the $225 Million Term Loan Maturing 2023, the $150 Million Term Loan Maturing 2023, and the $400 Million Term Loan Maturing 2025 are collectively referred to as the "Term Loans."

The Company's credit agreements consisted of the following (dollars in thousands):
Carrying Value at
Interest Rate at September 30, 2022 (1)Maturity DateSeptember 30, 2022December 31, 2021
Revolver (2)—%May 2024$— $200,000 
$400 Million Term Loan Maturing 2023 3.74%January 2023 (4)203,944 203,944 
$225 Million Term Loan Maturing 2023 3.32%January 2023 (5)114,718 114,718 
$150 Million Term Loan Maturing 20232.63%June 2023 (6)100,000 100,000 
$400 Million Term Loan Maturing 20253.12%May 2025400,000 400,000 
818,662 1,018,662 
Deferred financing costs, net (3)(2,346)(3,658)
Total Revolver and Term Loans, net$816,316 $1,015,004 
 
(1)Interest rate at September 30, 2022 gives effect to interest rate hedges.
(2)At September 30, 2022 and December 31, 2021, there was $600.0 million and $400.0 million of remaining capacity on the Revolver, respectively. The Company also has the ability to extend the maturity date for an additional one year period ending May 2025 if certain conditions are satisfied.
(3)Excludes $2.0 million and $2.9 million as of September 30, 2022 and December 31, 2021, respectively, related to deferred financing costs on the Revolver, which are included in prepaid expense and other assets in the accompanying consolidated balance sheets.
(4)This term loan includes a one-year extension option for approximately $151.7 million of the principal balance. The exercise of the one-year extension option will be at the Company's discretion, subject to certain conditions.
(5)This term loan includes a one-year extension option for approximately $73.0 million of the principal balance. The exercise of the one-year extension option will be at the Company's discretion, subject to certain conditions.
(6)The Company has the option to extend the maturity one additional year to June 2024.

The Revolver and Term Loans are subject to various financial covenants. A summary of the most restrictive covenants is as follows:
Original CovenantModified Covenant (3)Compliance
Leverage ratio (1)
<= 7.00x
<= 7.00x
Yes
Fixed charge coverage ratio (2)
>= 1.50x
>= 1.50x
Yes
Secured indebtedness ratio
<= 45.0%
<= 45.0%
Yes
Unencumbered indebtedness ratio
<= 60.0%
<= 65.0%
Yes
Unencumbered debt service coverage ratio
>= 2.00x
>= 1.65x
Yes

(1)Leverage ratio is net indebtedness, as defined in the Revolver and Term Loan agreements, to corporate earnings before interest, taxes, depreciation, and amortization ("EBITDA"), as defined in the Revolver and Term Loan agreements.
(2)Fixed charge coverage ratio is Adjusted EBITDA, generally defined in the Revolver and Term Loan agreements as EBITDA less furniture, fixtures and equipment ("FF&E") reserves, to fixed charges, which is generally defined in the Revolver and Term Loan agreements as interest expense, all regularly scheduled principal payments, preferred dividends paid, and cash taxes paid.
(3)During the year ended December 31, 2021, the Company amended its Revolver and Term Loans. The amendments suspended the testing of all existing financial maintenance covenants for all periods through and including the quarter ending March 31, 2022 (the “Covenant Relief Period”). During the quarter ended June 30, 2022, the Company exited the Covenant Relief Period. In addition, for periods following the Covenant Relief Period, the amendments modified certain covenant thresholds, including the leverage ratio, through the fifth quarter following the Covenant Relief Period (the "Leverage Relief Period").

In August 2022, the Company exited the Leverage Relief Period under its Revolver and Term Loan agreements. The impact of these exits includes the reinstatement of financial covenants, the elimination of the minimum liquidity financial covenant, the elimination of limitations on share repurchases and the reinstatement of the original leverage-based pricing grid.

Mortgage Loans 

The Company's mortgage loans consisted of the following (dollars in thousands):
Carrying Value at
Number of Assets EncumberedInterest Rate at September 30, 2022 Maturity DateSeptember 30, 2022December 31, 2021
Mortgage loan (1)73.30%(3)April 2023(4)$200,000 $200,000 
Mortgage loan (1)32.53%(3)April 2024(5)96,000 96,000 
Mortgage loan (1)43.43%(3)April 2024(5)85,000 85,000 
Mortgage loan (2)15.06%January 202927,283 27,554 
15408,283 408,554 
Deferred financing costs, net(563)(1,062)
Total mortgage loans, net$407,720 $407,492 

(1)The hotels encumbered by the mortgage loan are cross-collateralized. Requires payments of interest only through maturity.
(2)Includes $2.3 million and $2.6 million at September 30, 2022 and December 31, 2021, respectively, related to a fair value adjustment on this mortgage loan.
(3)Interest rate at September 30, 2022 gives effect to interest rate hedges.
(4)The mortgage loan provides for an additional one year extension option.
(5)The mortgage loan provides two one year extension options.
 
Certain mortgage agreements are subject to various maintenance covenants requiring the Company to maintain a minimum debt yield or debt service coverage ratio ("DSCR"). Failure to meet the debt yield or DSCR thresholds is not an event of default, but instead triggers a cash trap event. During the cash trap event, the lender or servicer of the mortgage loan controls cash outflows until the loan is covenant compliant. In addition certain mortgage loans have other requirements including continued operation and maintenance of the hotel property. At September 30, 2022 and December 31, 2021, one and two mortgage loans, respectively, were in cash trap events. In addition, the DSCR covenant for one mortgage loan has been waived through December 31, 2022.
At September 30, 2022 and December 31, 2021, there was approximately $20.4 million and $22.4 million, respectively, of restricted cash held by lenders due to cash trap events.

Interest Expense

The components of the Company's interest expense consisted of the following (in thousands):
For the three months ended September 30,For the nine months ended September 30,
2022202120222021
Senior Notes$9,695 $11,747 $29,125 $24,374 
Revolver and Term Loans7,870 11,780 26,975 43,216 
Mortgage loans3,388 2,580 9,926 10,328 
Amortization of deferred financing costs1,420 1,527 4,522 4,211 
Non-cash interest expense related to interest rate hedges252 (701)493 (935)
Total interest expense$22,625 $26,933 $71,041 $81,194