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Debt (Tables) | 9 Months Ended
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Sep. 30, 2023
Debt Disclosure [Abstract] |
Schedule of Debt | The Company's debt consisted of the following (in thousands):
| September 30, 2023 |  | December 31, 2022
Senior Notes, net | $ | 991,081 |  |  | $ | 989,307 |
Revolver | — |  |  | — |
Term Loans, net | 821,030 |  |  | 820,536 |
Mortgage loans, net | 407,670 |  |  | 407,712 |
Debt, net | $ | 2,219,781 |  |  | $ | 2,217,555 |
Schedule of Senior Notes | The Company's senior notes (collectively, the "Senior Notes") consisted of the following (dollars in thousands):
|  |  |  |  |  | Carrying Value at
|  | Interest Rate |  | Maturity Date |  | September 30, 2023 |  | December 31, 2022
2029 Senior Notes (1) |  | 4.00% |  | September 2029 |  | $ | 500,000 |  |  | $ | 500,000 |
2026 Senior Notes (1) |  | 3.75% |  | July 2026 |  | 500,000 |  |  | 500,000 |
|  |  |  |  |  | 1,000,000 |  |  | 1,000,000 |
Deferred financing costs, net |  |  |  |  |  | (8,919) |  |  | (10,693) |
Total senior notes, net |  |  |  |  |  | $ | 991,081 |  |  | $ | 989,307 |
(1)Requires payment of interest only through maturity.
Schedule Of Debt Instrument Covenants | A summary of the various restrictive covenants for the Senior Notes are as follows:
|  | Covenant |  | Compliance
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
The Revolver and Term Loans are subject to various financial covenants. A summary of the most restrictive covenants is as follows:
|  | Covenant |  |  |  | Compliance
Leverage ratio (1) |  | <= 7.25x |  |  |  | Yes
Fixed charge coverage ratio (2) |  | >= 1.50x |  |  |  | Yes
Secured indebtedness ratio |  | <= 45.0% |  |  |  | Yes
Unencumbered indebtedness ratio |  | <= 60.0% |  |  |  | Yes
Unencumbered debt service coverage ratio |  | >= 2.00x |  |  |  | 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.
Schedule of Revolver and Term Loans | The Company's unsecured credit agreements consisted of the following (dollars in thousands):
|  |  |  |  |  | Carrying Value at
|  | Interest Rate at September 30, 2023 (1) |  | Maturity Date |  | September 30, 2023 |  | December 31, 2022
Revolver (2) |  | —% |  | May 2027 |  | $ | — |  |  | $ | — |
$400 Million Term Loan Maturing 2023 (3) |  | —% |  | — |  | — |  |  | 52,261 |
$400 Million Term Loan Maturing 2024 (4) |  | —% |  | — |  | — |  |  | 151,683 |
$225 Million Term Loan Maturing 2023 (3) |  | —% |  | — |  | — |  |  | 41,745 |
$225 Million Term Loan Maturing 2024 (4) |  | —% |  | — |  | — |  |  | 72,973 |
$400 Million Term Loan Maturing 2025 |  | 3.38% |  | May 2025 |  | 400,000 |  |  | 400,000 |
$200 Million Term Loan Maturing 2026 (5) |  | 3.48% |  | January 2026 (6) |  | 200,000 |  |  | 105,000 |
$225 Million Term Loan Maturing 2026 |  | 2.97% |  | May 2026 (6) |  | 225,000 |  |  | — |
|  |  |  |  |  | 825,000 |  |  | 823,662 |
Deferred financing costs, net (7) |  |  |  |  |  | (3,970) |  |  | (3,126) |
Total Revolver and Term Loans, net |  |  |  |  |  | $ | 821,030 |  |  | $ | 820,536 |
(1)Interest rate at September 30, 2023 gives effect to interest rate hedges. (2)There was $600.0 million of capacity on the Revolver at both September 30, 2023 and December 31, 2022. The Company has the ability to extend the maturity date for an additional one-year period or up to two six-month periods ending May 2028 if certain conditions are satisfied. (3)In January 2023, the Company received the remaining $95.0 million in proceeds on the $200 Million Term Loan Maturing 2026 and utilized these proceeds to pay off these Term Loans. (4)In May 2023, the Company entered into the $225 Million Term Loan Maturing 2026 and utilized the proceeds to pay off these Term Loans. (5)In January 2023, the Company received the remaining $95.0 million in proceeds on this Term Loan. (6)This Term Loan includes two one-year extension options. The exercise of the extension options will be at the Company's discretion, subject to certain conditions. (7)Excludes $6.0 million and $1.7 million as of September 30, 2023 and December 31, 2022, respectively, related to deferred financing costs on the Revolver, which are included in prepaid expense and other assets in the accompanying consolidated balance sheets.
Schedule of mortgage loans | The Company's mortgage loans consisted of the following (dollars in thousands):
|  |  |  |  |  |  |  | Carrying Value at
|  | Number of Assets Encumbered |  | Interest Rate at September 30, 2023 |  | Maturity Date |  | September 30, 2023 |  | December 31, 2022
Mortgage loan (1) |  | 7 |  | 5.94% | (3) | April 2024 | (4) | $ | 200,000 |  |  | $ | 200,000 |
Mortgage loan (1) |  | 3 |  | 5.02% | (3) | April 2024 | (5) | 96,000 |  |  | 96,000 |
Mortgage loan (1) |  | 4 |  | 5.61% | (3) | April 2024 | (5) | 85,000 |  |  | 85,000 |
Mortgage loan (2) |  | 1 |  | 5.06% |  | January 2029 |  | 26,923 |  |  | 27,193 |
|  | 15 |  |  |  |  |  | 407,923 |  |  | 408,193 |
Deferred financing costs, net |  |  |  |  |  |  |  | (253) |  |  | (481) |
Total mortgage loans, net |  |  |  |  |  |  |  | $ | 407,670 |  |  | $ | 407,712 |
(1)The hotels encumbered by the mortgage loan are cross-collateralized. Requires payments of interest only through maturity. (2)Includes $1.9 million and $2.2 million at September 30, 2023 and December 31, 2022, respectively, related to a fair value adjustment on this mortgage loan. (3)Interest rate at September 30, 2023 gives effect to interest rate hedges. (4)In April 2023, the Company exercised its final extension option to extend the maturity on this mortgage loan to April 2024. (5)This mortgage loan provides two one-year extension options, subject to certain conditions.
Schedule of Interest Expense Components | 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,
| 2023 |  | 2022 |  | 2023 |  | 2022
Senior Notes | $ | 9,695 |  |  | $ | 9,695 |  |  | $ | 29,070 |  |  | $ | 29,125 |
Revolver and Term Loans | 7,365 |  |  | 7,870 |  |  | 23,176 |  |  | 26,975 |
Mortgage loans | 5,727 |  |  | 3,388 |  |  | 15,286 |  |  | 9,926 |
Amortization of deferred financing costs | 1,564 |  |  | 1,420 |  |  | 4,528 |  |  | 4,522 |
Non-cash interest expense related to interest rate hedges | 482 |  |  | 252 |  |  | 1,446 |  |  | 493 |
Total interest expense | $ | 24,833 |  |  | $ | 22,625 |  |  | $ | 73,506 |  |  | $ | 71,041 |

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