Indebtedness, net

12 Months Ended

Dec. 31, 2022

Indebtedness consisted of the following (in thousands):


				December 31, 2022				December 31, 2021
Indebtedness	Collateral	Maturity	Interest Rate	Debt Balance		Book Value of Collateral		Debt Balance		Book Value of Collateral
Mortgage loan (3)	1 hotel	July 2022	LIBOR (1) + 3.95%	$	—	$	—	$	33,200	$	36,116
Mortgage loan (4) (5)	1 hotel	November 2022	LIBOR (1) + 2.70%	—		—		25,000		46,833
Mortgage loan (6) (7)	1 hotel	December 2022	LIBOR (1) + 2.25%	—		—		16,100		24,519
Mortgage loan (8)	1 hotel	January 2023	LIBOR (1) + 3.40%	—		—		37,000		54,837
Mortgage loan (9)	8 hotels	February 2023	LIBOR (1) + 3.07%	395,000		288,740		395,000		294,382
Mortgage loan (10)	2 hotels	March 2023	LIBOR (1) + 2.75%	240,000		207,265		240,000		212,889
Mortgage loan (11)	19 hotels	April 2023	LIBOR(1) + 3.20%	907,030		932,715		910,694		968,078
Mortgage loan	1 hotel	June 2023	LIBOR (1) + 2.45%	73,450		100,142		73,450		102,317
Mortgage loan (12)	7 hotels	June 2023	LIBOR(1) + 3.65%	180,720		124,761		180,720		122,346
Mortgage loan (12)	7 hotels	June 2023	LIBOR (1) + 3.39%	174,400		118,783		174,400		120,065
Mortgage loan (12)	5 hotels	June 2023	LIBOR (1) + 3.73%	221,040		145,085		221,040		152,371
Mortgage loan (12)	5 hotels	June 2023	LIBOR (1) + 4.02%	262,640		80,554		262,640		84,690
Mortgage loan (12)	5 hotels	June 2023	LIBOR (1) + 2.73%	160,000		168,223		160,000		171,440
Mortgage loan (12)	5 hotels	June 2023	LIBOR (1) + 3.68%	215,120		164,792		215,120		174,749
Mortgage loan (13)	17 hotels	November 2023	LIBOR (1) + 3.13%	415,000		220,462		419,000		226,178
Mortgage loan (4)	1 hotel	November 2023	SOFR (2) + 2.80%	25,000		46,659		—		—
Mortgage loan (6)	1 hotel	December 2023	SOFR (2) + 2.85%	15,290		23,440		—		—
Mortgage loan	1 hotel	January 2024	5.49%	6,345		6,556		6,492		6,943
Mortgage loan	1 hotel	January 2024	5.49%	9,261		13,638		9,474		15,196
Term loan (14)	Equity	January 2024	16.00%	195,959		—		200,000		—
Mortgage loan	1 hotel	May 2024	4.99%	5,819		5,983		6,150		6,156
Mortgage loan (15)	1 hotel	June 2024	LIBOR (1) + 2.00%	—		—		8,881		6,968
Mortgage loan (15) (16)	1 hotel	June 2024	SOFR (2) + 2.00%	8,881		6,651		—		—
Mortgage loan	2 hotels	August 2024	4.85%	11,172		8,404		11,427		9,326
Mortgage loan	3 hotels	August 2024	4.90%	22,349		17,041		22,853		14,347
Mortgage loan (17)	1 hotel	November 2024	LIBOR (1) + 4.65%	85,552		87,139		84,000		93,848
Mortgage loan (8) (18)	1 hotel	December 2024	SOFR (2) + 4.00%	37,000		53,525		—		—
Mortgage loan	3 hotels	February 2025	4.45%	46,918		56,536		50,098		59,578
Mortgage loan	1 hotel	March 2025	4.66%	23,326		43,879		23,883		42,915
Mortgage loan (19)	1 hotel	August 2025	LIBOR (1) + 3.80%	—		—		98,000		174,743
Mortgage loan (19)	1 hotel	August 2025	SOFR (2) + 3.91%	98,000		170,329		—		—
				$	3,835,272	$	3,091,302	$	3,884,622	$	3,221,830
Premiums (discounts), net				(20,249)				(32,777)
Capitalized default interest and late charges				8,363				23,511
Deferred loan costs, net				(8,530)				(15,440)
Embedded debt derivative				23,687				27,906
Indebtedness, net				$	3,838,543			$	3,887,822

_____________________________

(1) LIBOR rates were 4.392% and 0.101% at December 31, 2022 and December 31, 2021, respectively.

(2) SOFR rate was 4.358% at December 31, 2022.

(3) On September 1, 2022, we sold the property securing this mortgage loan. The assets and liabilities associated with this mortgage loan have been removed from the Company's consolidated balance sheet. See note 5.

(4) On November 9, 2022, we amended this mortgage loan. Terms of the amendment replaced the variable interest rate of LIBOR + 2.70% with SOFR + 2.80%. This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions. The third one-year extension period began in November 2022.

(5) This mortgage loan has a LIBOR floor of 1.25%.

(6) On December 15, 2022, we amended this mortgage loan. Terms of the amendment replaced the variable interest rate of LIBOR + 2.25% with SOFR + 2.85%. Additionally, we paid down $810,000 of principal. This loan has two one-year extension options, subject to satisfaction of certain conditions. The first one-year extension period began in December 2022.

(7) This mortgage loan has a LIBOR floor of 0.25%.

(8) On December 22, 2022, we amended this mortgage loan. Terms of the amendment replaced the variable interest rate of LIBOR + 3.40% with SOFR + 4.00%, extended the current maturity date to December 2024, and added three one-year extension options, subject to satisfaction of certain conditions.

(9) This mortgage loan has five one-year extension options, subject to satisfaction of certain conditions. The fourth one-year extension period began in February 2023. Additionally in February 2023, the Company repaid $50.0 million in principal on this mortgage loan and reduced the 2024 debt yield extension test from 9.25% to 8.50%.

(10) This mortgage loan has five one-year extension options, subject to satisfaction of certain conditions. The third one-year extension period began in March 2023.

(11) This mortgage loan has five one-year extension options, subject to satisfaction of certain conditions. The third one-year extension period began in April 2022.

(12) This mortgage loan has five one-year extension options, subject to satisfaction of certain conditions. The third one-year extension period began in June 2022.

(13) This mortgage loan has five one-year extension options, subject to satisfaction of certain conditions. The fourth one-year extension period began in November 2022. On March 2, 2022, we repaid $4.0 million of principal on this mortgage loan.

(14) This term loan has two one-year extension options, subject to satisfaction of certain conditions. On September 1, 2022, we repaid $4.0 million of principal on this term loan.

(15) On December 7, 2022, we amended this mortgage loan. Terms of the amendment replaced the variable interest rate of LIBOR + 2.00% with SOFR + 2.00%.

(16) This mortgage loan has a SOFR floor of 2.00%.

(17) This mortgage loan has two one-year extension options, subject to the satisfaction of certain conditions. This mortgage loan has a LIBOR floor of 0.10%. Effective September 23, 2022, we drew $1.6 million of the $2.0 million of future additional funding available to replenish restricted cash balances in accordance with the terms of the mortgage loan.

(18) This mortgage loan has a SOFR floor of 0.50%.

(19) On November 9, 2022, we amended this mortgage loan. Terms of the amendment replaced the variable interest rate of LIBOR + 3.80% with SOFR + 3.91%. This mortgage loan has one one-year extension option, subject to satisfaction of certain conditions.

We recognized net premium (discount) amortization as presented in the table below (in thousands):


	Year Ended December 31,
Line Item		2022		2021		2020
Interest expense and amortization of discounts and loan costs		$	(12,015)	$	(7,142)	$	154

The amortization of the net premium (discount) is computed using a method that approximates the effective interest method.

During the years ended December 31, 2021 and 2020 the Company entered into forbearance and other agreements which were evaluated to be considered troubled debt restructurings due to terms that allowed for deferred interest and the forgiveness of default interest and late charges. As a result of the troubled debt restructurings all accrued default interest and late charges were capitalized into the applicable loan balances and are being amortized over the remaining term of the loan using the effective interest method. The amount of default interest and late charges capitalized into the loan balance was $33.2 million and $47.5 million during the years ended December 31, 2021 and 2020. No gain or loss was initially recognized as the carrying amount of the original loans was not greater than the undiscounted cash flows of the modified loans. The amount of the capitalized principal that was amortized during the years ended December 31, 2022, 2021 and 2020, was $15.1 million, $35.7 million and $20.0 million, respectively. These amounts are included as a reduction to “interest expense and amortization of discounts and loan costs” in the consolidated statements of operations.

We have extension options relating to certain property-level loans that will permit us to extend the maturity date of our loans if certain conditions are satisfied at the respective extension dates, including the achievement of debt yield targets required in order to extend such loans. To the extent we decide to extend the maturity date of the debt outstanding under the loans, we may be required to prepay a significant amount of the loans in order to meet the required debt yield targets.

If we violate covenants in our debt agreements, we could be required to repay all or a portion of our indebtedness before maturity at a time when we might be unable to arrange financing for such repayment on attractive terms, if at all. As of December 31, 2022, we were in compliance with all covenants related to mortgage loans. We were also in compliance with all covenants under the senior secured term loan facility with Oaktree Capital Management L.P. (“Oaktree”) (the “Oaktree Credit Agreement”). The assets of certain of our subsidiaries are pledged under non-recourse indebtedness and are not available to satisfy the debts and other obligations of Ashford Trust or Ashford Trust OP, our operating partnership, and the liabilities of such subsidiaries do not constitute the obligations of Ashford Trust or Ashford Trust OP.

Maturities and scheduled amortizations of indebtedness as of December 31, 2022 for each of the five following years and thereafter are as follows (in thousands):


2023	$	3,287,656
2024	382,965
2025	164,651
2026	—
2027	—
Thereafter	—
Total	$	3,835,272