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Debt | 12 Months Ended
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Dec. 31, 2012
Debt | NOTE 11 - DEBT Our debt is comprised of a senior secured revolving credit facility and term loans secured by various hotel properties. At December 31, 2012 and 2011 our debt included (in thousands):
Lender |  | Note Reference |  | Interest Rate at December 31, 2012 a) |  |  | Amortization Period (Years) |  |  | Maturity Date |  |  | Number of Properties Encumbered |  |  | 2012 |  |  | 2011 |
Senior Secured Revolving Credit Facility |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deutsche Bank AG New York Branch |  | b) |  | 3.00% Variable |  |  | n/a |  |  | May 16, 2015 |  |  | 26 |  |  | $ | 58,000 |  |  | $ | 11,426 |
Term Loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
ING Life Insurance and Annuity |  | c) |  | 6.10% Fixed |  |  | 20 |  |  | March 1, 2032 |  |  | 16 |  |  |  | 66,174 |  |  |  | - |
|  |  |  | -- |  |  | -- |  |  | -- |  |  | - |  |  |  | - |  |  |  | 27,646 |
|  |  |  | -- |  |  | -- |  |  | -- |  |  | - |  |  |  | - |  |  |  | 28,158 |
|  |  |  | -- |  |  | -- |  |  | -- |  |  | - |  |  |  | - |  |  |  | 6,047 |
|  |  |  | -- |  |  | -- |  |  | -- |  |  | - |  |  |  | - |  |  |  | 7,655 |
Empire Financial Services, Inc. |  | d) |  | 6.00% Fixed |  |  | 25 |  |  | February 1, 2017 |  |  | 1 |  |  |  | 18,699 |  |  |  | - |
Bank of America Commercial Mortgage |  | e) |  | 6.41% Fixed |  |  | 25 |  |  | September 1, 2017 |  |  | 1 |  |  |  | 8,593 |  |  |  | - |
Merrill Lynch Mortgage Lending Inc. |  | f) |  | 6.384% Fixed |  |  | 30 |  |  | August 1, 2016 |  |  | 1 |  |  |  | 5,341 |  |  |  | - |
GE Capital Financial Inc. |  | g) |  | 6.03% Fixed |  |  | 25 |  |  | May 1, 2017 |  |  | 2 |  |  |  | 14,851 |  |  |  | - |
National Western Life Insurance |  |  |  | -- |  |  |  |  |  | -- |  |  | - |  |  |  | - |  |  |  | 13,197 |
Chambers Bank |  | h) |  | 6.50% Fixed |  |  | 20 |  |  | June 24, 2014 |  |  | 1 |  |  |  | 1,417 |  |  |  | 1,507 |
Bank of the Ozarks |  | i) |  | 5.75% Fixed |  |  | 25 |  |  | July 10, 2017 |  |  | 1 |  |  |  | 8,778 |  |  |  | 6,334 |
MetaBank |  | j) |  | 4.95% Fixed |  |  | 17 |  |  | February 1, 2017 |  |  | 2 |  |  |  | 6,786 |  |  |  | 7,058 |
Bank of Cascades |  | k) |  | 4.66% Fixed |  |  | 25 |  |  | September 30, 2021 |  |  | 1 |  |  |  | 12,283 |  |  |  | 12,557 |
Goldman Sachs |  |  |  | 5.67% Fixed |  |  | 25 |  |  | July 6, 2016 |  |  | 2 |  |  |  | 14,376 |  |  |  | 14,644 |
BNC National |  |  |  | 5.01% Fixed |  |  | 20 |  |  | November 1, 2013 |  |  | 1 |  |  |  | 5,308 |  |  |  | 5,519 |
|  |  |  | -- |  |  | -- |  |  | -- |  |  | - |  |  |  | - |  |  |  | 5,700 |
Compass Bank |  | l) |  | 4.57% Fixed |  |  | 20 |  |  | May 17, 2018 |  |  | 1 |  |  |  | 14,144 |  |  |  | 16,083 |
General Electric Capital Corporation |  | m) |  | 5.46% Fixed |  |  | 25 |  |  | April 1, 2017 |  |  | 1 |  |  |  | 5,481 |  |  |  | - |
|  | m) |  | 5.46% Fixed |  |  | 25 |  |  | April 1, 2017 |  |  | 1 |  |  |  | 6,419 |  |  |  | - |
|  | n) |  | 5.37% Fixed |  |  | 20 |  |  | April 1, 2018 |  |  | 2 |  |  |  | 7,998 |  |  |  | 8,315 |
|  | n) |  | 5.59% Fixed |  |  | 25 |  |  | March 1, 2019 |  |  | 2 |  |  |  | 10,434 |  |  |  | 10,709 |
|  | n) |  | 4.61% Fixed |  |  | 25 |  |  | April 1, 2014 |  |  | 2 |  |  |  | 10,568 |  |  |  | 10,860 |
AIG |  | o) |  | 6.11% Fixed |  |  | 20 |  |  | January 1, 2016 |  |  | 1 |  |  |  | 14,059 |  |  |  | - |
First National Bank of Omaha |  | p) |  | 5.25% Variable |  |  | 20 |  |  | February 1, 2014 |  |  | 1 |  |  |  | 8,241 |  |  |  | 8,552 |
|  | p) |  | 5.25% Variable |  |  | 20 |  |  | July 1, 2013 |  |  | 2 |  |  |  | 14,663 |  |  |  | 15,137 |
Total Term Loans |  |  |  |  |  |  |  |  |  |  |  |  | 42 |  |  |  | 254,613 |  |  |  | 205,678 |
Total Debt |  |  |  |  |  |  |  |  |  |  |  |  | 68 |  |  | $ | 312,613 |  |  | $ | 217,104 |
Notes: a) Interest rates at December 31, 2012 give effect to our use of interest rate swaps, where applicable. b) This is a $150.0 million facility with Deutsche Bank AG New York Branch as the administrative agent and Deutsche Bank Securities as the lead manager. The syndicate of lenders includes Deutsche Bank, Royal Bank of Canada, KeyBank National Association, Regions Bank, U.S. Bank National Association, and Citibank, N.A. We pay interest on advances at varying rates, based upon, at our option, either (i) 1, 2, 3, or 6-month LIBOR, subject to a floor of 0.50%, plus a LIBOR margin between 2.25% and 2.75%, depending upon the ratio of our outstanding consolidated indebtedness to EBITDA (as defined in the loan documents), or (ii) the applicable base rate, which is the greatest of the administrative agent’s prime rate, 0.50% plus the federal funds effective rate, or 1-month LIBOR (incorporating the floor of 0.50%) plus 1.00%, plus a margin between 1.25% and 1.75%, depending upon the ratio of outstanding consolidated indebtedness to EBITDA. Availability under the facility is subject to a borrowing base of properties pledged as collateral and other conditions. At December 31, 2012, the borrowing base was $112.1 million, of which we had $58.0 million borrowed, $1.3 million in standby letters of credit, and $52.8 million available to borrow. c) On February 13, 2012, we consolidated and refinanced our four loans with ING Life Insurance and Annuity (“ING”) into a single term loan. ING has the right to call the loan in full at March 1, 2019, 2024 and 2029. If the loan is prepaid prior to maturity, other than if called, there is a prepayment penalty equal to the greater of i) 1% of the principal being prepaid or ii) the yield maintenance premium. d) On January 12, 2012, we entered into a term loan to modify the loan assumed in our acquisition of the Courtyard by Marriott in Atlanta, GA. e) On May 16, 2012, we assumed a term loan in our acquisition of the Hilton Garden Inn in Smyrna, TN. This loan is subject to defeasance if prepaid. f) On June 21, 2012, we assumed a term loan in our acquisition of the Hampton Inn & Suites in Smyrna, TN. This loan is subject to defeasance if prepaid. g) On April 4, 2012, we refinanced two National Western Life Insurance loans with GE Capital Financial Inc. The new loans have prepayment penalties of 1% plus defeasance and are cross-defaulted and cross-collateralized. h) On June 24, 2012, we refinanced and extended the maturity of this loan. We also replaced a guaranty from an affiliate of our Predecessor with a guaranty from Summit Hotel Properties, Inc. limited to non-recourse carve-outs. i) On June 29, 2012, we refinanced and extended the maturity of this loan. In addition, we borrowed an additional $2.5 million representing the amount available pursuant to the earn-out provision of the loan. The interest rate is fixed for three years, with the rate variable at 90-day LIBOR plus 3.75% with a floor of 5.5% thereafter. j) On February 14, 2012, we refinanced and extended the maturity of this loan. The new loan has a prepayment penalty in the first two years of 3%, in year three of 2%, and in years four and five of 1%. k) The fixed rate of 4.66% resets on September 30, 2016 to the then-current Federal Home Loan Bank of Seattle Intermediate/Long-Term, Advances Five-year Fixed Rate plus 3.00%. l) This loan has a variable interest rate of 30-day LIBOR plus 350 basis points (3.71% at December 31, 2012). On October 11, 2012, we entered into an interest rate derivative that effectively converted 85% of this loan to a fixed rate. m) On March 2, 2012, we entered into two term loans for the purchase of two Hilton Garden Inns in Birmingham, AL. The interest rate on these new term loans is fixed for the first three years and then each loan will convert to a variable rate of 90-day LIBOR plus 5.28%. The loans may not be prepaid in the first year and have prepayment penalties in the second year of 2% and in the third year of 1%. These loans are cross-defaulted and cross-collateralized. n) These loans have a variable interest rate of 90-day LIBOR plus 350 basis points. On May 4, 2012, we entered into interest rate derivatives that effectively converted these loans to a fixed rate. These loans are cross-defaulted and cross-collateralized. o) On December 20, 2012, we assumed a term loan in our acquisition of the Residence Inn by Marriott in Salt Lake City, UT. This loan has a prepayment penalty of the greater of 1% or the yield maintenance premium. p) These loans have a variable interest rate of 90 day LIBOR plus 4.0% and a floor of 5.25% and are cross-defaulted and cross-collateralized. Our total fixed-rate and variable-rate debt at December 31, 2012 and 2011, after giving effective to our interest rate derivatives, follows (in thousands):
|  | 2012 |  |  | 2011 |
Fixed-rate debt |  | $ | 229,587 |  |  | $ | 122,630 |
Variable-rate debt |  |  | 83,026 |  |  |  | 94,474 |
|  | $ | 312,613 |  |  | $ | 217,104 |
Maturities of long-term debt for each of the next five years are (in thousands):
2013 |  | $ | 36,102 |
2014 |  |  | 10,800 |
2015 |  |  | 58,370 |
2016 |  |  | 33,745 |
2017 |  |  | 67,436 |
Thereafter |  |  | 106,160 |
|  | $ | 312,613 |
The weighted average interest rate for all borrowings was 5.15% and 5.38% at December 31, 2012 and 2011, respectively. In 2011, we utilized $227.2 million of the net proceeds from our IPO and concurrent private placement to prepay the following mortgage indebtedness in full, including associated costs:
― | $89.3 million to Fortress Credit Corp., including $2.1 million of exit fees, interest and legal fees;
― | $78.2 million to Lehman Brothers Bank, including $1.4 million in extinguishment premium and other transaction costs;
― | $21.4 million to Marshall & Isley Bank; and
― | $38.3 million to First National Bank of Omaha.
Information about the fair value of our fixed-rate debt that is not recorded at fair value follows (in thousands):
|  | 2012 |  |  | 2011 |  |  |
|  | Carrying Value |  | Fair Value |  |  | Carrying Value |  | Fair Value |  |  | Valuation Technique
Fixed-rate debt |  | $ | 188,565 |  |  | $ | 193,448 |  |  | $ | 122,830 |  |  | $ | 122,950 |  |  | Level 2 - Market approach
At December 31, 2012, we had $41.0 million of debt with variable interest rates that had been converted to fixed interest rates through derivative financial instruments which are carried at fair value. Differences between carrying value and fair value of our fixed-rate debt are primarily due to changes in interest rates. Inherently, fixed-rate debt is subject to fluctuations in fair value.

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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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 129 -Paragraph 2, 4 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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