Debt

The Company's mortgage loans and its senior unsecured revolving credit facility are collateralized by first-mortgage liens on certain of the Company's properties. The mortgages are non-recourse except for instances of fraud or misapplication of funds. Debt consisted of the following (in thousands):



Loan/Collateral	Interest Rate		Maturity Date	12/31/16 Property Carrying Value		Balance Outstanding as of
Loan/Collateral	Interest Rate		Maturity Date	12/31/16 Property Carrying Value		December 31, 2016			December 31, 2015
Senior Unsecured Revolving Credit Facility (1)	2.75	%	November 25, 2019	$	—	$	52,500		$	65,580
Courtyard by Marriott Altoona, PA (8)	5.96	%	April 1, 2016	9,699		—			5,954
Residence Inn by Marriott New Rochelle, NY	5.75	%	September 1, 2021	20,071		14,141			14,496
Residence Inn by Marriott San Diego, CA	4.66	%	February 6, 2023	44,758		29,026			29,555
Homewood Suites by Hilton San Antonio, TX	4.59	%	February 6, 2023	33,014		16,575			16,880
Residence Inn by Marriott Vienna, VA	4.49	%	February 6, 2023	30,926		22,699			23,124
Courtyard by Marriott Houston, TX	4.19	%	May 6, 2023	31,368		18,758			19,123
Hyatt Place Pittsburgh, PA	4.65	%	July 6, 2023	35,657		22,864			23,268
Residence Inn by Marriott Bellevue, WA	4.97	%	December 6, 2023	69,251		46,206			46,907
Residence Inn by Marriott Garden Grove, CA (2)	4.79	%	April 6, 2024	40,307		33,674			34,000
Residence Inn by Marriott Silicon Valley I, CA (3)	4.64	%	July 1, 2024	83,041		64,800			64,800
Residence Inn by Marriott Silicon Valley II, CA (3)	4.64	%	July 1, 2024	90,952		70,700			70,700
Residence Inn by Marriott San Mateo, CA (3)	4.64	%	July 1, 2024	65,395		48,600			48,600
Residence Inn by Marriott Mountain View, CA (3)	4.64	%	July 1, 2024	57,091		37,900			37,900
SpringHill Suites by Marriott Savannah, GA (4)	4.62	%	July 6, 2024	37,444		30,000			30,000
Hilton Garden Inn Marina del Rey, CA (7)	4.68	%	July 6, 2024	43,133		22,145			22,510
Homewood Suites by Hilton Billerica, MA (5)	4.32	%	December 6, 2024	11,557		16,225			16,225
Homewood Suite by Hilton Carlsbad, CA (5)	4.32	%	December 6, 2024	29,732		19,950			19,950
Hampton Inn & Suites Houston Medical Cntr., TX (6)	4.25	%	January 6, 2025	14,840		18,300			18,300
Total debt before unamortized debt issue costs				$	748,236	$	585,063		$	607,872
Unamortized mortgage debt issue costs						(2,240		)	(2,669		)
Total debt outstanding						582,823			605,203


(1)	The interest rate for the senior unsecured revolving credit facility is variable and based on LIBOR plus an applicable margin ranging from 1.55% to 2.3%, or prime plus an applicable margin of 0.55% to 1.3%.


(2)	On March 21, 2014, the Company refinanced the mortgage for the Residence Inn Garden Grove hotel. The new loan has a 10-year term and a 30-year amortization payment schedule but is interest only for the first 12 months. The Company incurred $0.2 million in costs for the early extinguishment of debt related to the old loan.


(3)	On June 9, 2014, the Company obtained 4 new mortgage loans secured by first mortgages on the Silicon Valley I, Silicon Valley II, San Mateo and Mountain View hotels, respectively. The new loans have 10-year terms and 30-year amortization payment schedules but are interest only for the first 60 months.


(4)	On July 2, 2014, the Company obtained a new mortgage loan secured by a first mortgage on the Springhill Suites Savannah hotel. The loan has a 10-year term and a 30-year amortization payment schedule but is interest only for the first 60 months.


(5)	On November 25, 2014, the Company obtained 2 new mortgage loans secured by first mortgages on each of the Homewood Suites by Hilton Billerica and Homewood Suites by Hilton Carlsbad hotels. The loans have 10-year terms and 30-year amortization payment schedules but are interest only for the first 36 months.


(6)	On December 17, 2014, the Company obtained a new mortgage loan secured by a first mortgage on the Hampton Inn and Suites by Hilton Houston Medical Center hotel. The loan has a 10-year term, a 30-year amortization payment schedule but is interest only for the first 36 months.


(7)	On September 17, 2015, the Company assumed the mortgage loan secured by a first mortgage on the Hilton Garden Inn Marina del Rey hotel. The loan has a 10-year term, a 30-year amortization payment schedule.


(8)	On January 4, 2016, the Company paid off the loan secured by the Courtyard by Marriott Altoona, PA hotel, due April 1, 2016.

On November 25, 2015, the Company, as parent guarantor, and the Operating Partnership, as borrower, entered into a new unsecured revolving credit agreement with the lenders party thereto, Barclays Bank PLC, Citigroup Global Markets Inc., Regions Capital Markets and U.S. Bank National Association as joint lead arrangers, Barclays Bank PLC as administrative agent, Regions Bank as syndication agent and Citibank, N.A. and U.S. Bank National Association as co-documentation agents (the “New Credit Agreement”). The New Credit Agreement has an initial maturity date of November 25, 2019, which may be extended for an additional year upon the payment of applicable fees and satisfaction of certain customary conditions. In connection with the entry into the New Credit Agreement, the Company and the Operating Partnership terminated the Amended and Restated Credit Agreement, dated as of November 5, 2012, as amended, among the Company, the Operating Partnership, the lenders party thereto, Barclays Capital Inc. and Regions Capital Markets as joint lead arrangers, Barclays Bank PLC as administrative agent, Regions Bank as syndication agent, Credit Agricole Corporate and Investment Bank, UBS Securities and US Bank National Association as co-documentation agents (the "Existing Credit Agreement"), which was composed of a secured revolving credit facility that provided borrowing capacity of up to $175.0 million. Proceeds under the New Credit Agreement were used to repay outstanding borrowings under the Existing Credit Agreement. The New Credit Agreement includes limitations on the extent of allowable distributions from the operating partnership to the Company not to exceed the greater of 95% of adjusted funds from operations and the minimum amount of distributions required for the Company to maintain its REIT status. Other key terms are as follows:



Borrowing Capacity:		Up to $250.0 Million
Accordion feature:		Increase borrowing capacity by up to additional $150.0 million
Interest rate:		Floating rate based on LIBOR plus 155-230 basis points, based on leverage ratio
Unused fee:		20 basis points if less than 50% unused, 30 basis points if more than 50% unused
Maximum leverage ratio:		60%
Minimum fixed charge coverage ratio:		1.5x

At December 31, 2016 and 2015, the Company had $52.5 million and $65.6 million, respectively, of outstanding borrowings under its senior unsecured revolving credit facility. At December 31, 2016, the maximum borrowing availability under the senior unsecured revolving credit facility was $250.0 million.

The Company estimates the fair value of its fixed rate debt, which is all of the Company's mortgage loans, by discounting the future cash flows of each instrument at estimated market rates. Rates take into consideration general market conditions, quality and estimated value of collateral and maturity of debt with similar credit terms and are classified within level 3 of the fair value hierarchy. The estimated fair value of the Company’s fixed rate debt as of December 31, 2016 and 2015 was $516.0 million and $522.7 million, respectively.

The Company estimates the fair value of its variable rate debt by taking into account general market conditions and the estimated credit terms it could obtain for debt with a similar maturity and that is classified within level 3 of the fair value hierarchy. As of December 31, 2016, the Company’s only variable rate debt is under its senior unsecured revolving credit facility. The estimated fair value of the Company’s variable rate debt as of December 31, 2016 and 2015 was $52.5 million and $65.6 million, respectively.

As of December 31, 2016, the Company was in compliance with all of its financial covenants. At December 31, 2016, the Company’s consolidated fixed charge coverage ratio was 3.4 and the bank covenant is 1.5. Future scheduled principal payments of debt obligations as of December 31, 2016, for each of the next five calendar years and thereafter are as follows (in thousands):



	Amount
2017	$	4,302
2018	5,374
2019	59,840
2020	9,899
2021	22,309
Thereafter	483,339
Total	$	585,063