Debt

The following table presents the non-recourse debt, net on our Consolidated Hotel investments (dollars in thousands):



				Carrying Amount at
Consolidated Hotels	Interest Rate	Rate Type	Current Maturity Date	March 31, 2016		December 31, 2015
Courtyard Pittsburgh Shadyside ^{(a) (b)}	4.09%	Variable	3/2017	19,941		20,126
Ritz-Carlton Key Biscayne ^(c)	6.09%	Fixed	6/2017	167,748		168,503
Sanderling Resort ^{(a) (d)}	4.94%	Variable	10/2017	21,807		21,777
Courtyard San Diego Mission Valley ^{(a) (d)}	4.60%	Variable	12/2017	48,883		49,126
Hampton Inn Memphis Beale Street	4.07%	Fixed	3/2018	20,795		20,926
Hampton Inn Atlanta Downtown	4.12%	Fixed	3/2018	12,901		12,974
Hampton Inn Birmingham Colonnade	4.12%	Fixed	3/2018	8,904		8,953
Hampton Inn Frisco Legacy Park	4.12%	Fixed	3/2018	8,719		8,768
Hilton Garden Inn Baton Rouge Airport	4.12%	Fixed	3/2018	9,293		9,345
Hampton Inn Boston Braintree ^{(a) (d)}	3.44%	Variable	3/2018	11,836		11,815
Lake Arrowhead Resort and Spa ^{(a) (d)}	2.69%	Variable	6/2018	14,714		14,681
Ritz-Carlton Fort Lauderdale ^{(a) (d) (e)}	2.84% 7.67%	Variable	7/2018	68,941		68,824
Sheraton Austin Hotel at the Capitol	3.96%	Fixed	6/2019	66,818		66,803
Marriott Boca Raton at Boca Center ^(a)	3.69%	Variable	7/2019	40,605		40,574
Hilton Garden Inn New Orleans French Quarter/CBD	5.30%	Fixed	7/2019	10,506		10,540
Staybridge Suites Savannah Historic District	4.70%	Fixed	11/2019	14,734		14,726
Hawks Cay Resort ^{(a) (d) (f)}	3.44%	Variable	3/2020	98,041		78,591
Hutton Hotel Nashville	5.25%	Fixed	7/2020	43,838		43,828
Le Méridien Dallas, The Stoneleigh ^(a)	3.69%	Variable	12/2020	44,405		44,384
Renaissance Chicago Downtown	4.71%	Fixed	1/2021	89,719		89,704
Equinox ^(g)	4.51%	Fixed	3/2021	46,105		—
Courtyard Times Square West	4.62%	Fixed	6/2021	55,311		55,506
Hampton Inn & Suites/Homewood Suites Denver Downtown Convention Center	3.80%	Fixed	7/2021	52,810		52,801
Marriott Kansas City Country Club Plaza	4.42%	Fixed	12/2021	38,346		38,339
Westin Minneapolis	3.63%	Fixed	3/2022	43,268		43,258
Westin Pasadena	3.83%	Fixed	5/2022	88,332		88,325
Hilton Garden Inn/Homewood Suites Atlanta Midtown	3.75%	Fixed	5/2022	37,765		37,755
Fairmont Sonoma Mission Inn & Spa ^(h)	4.36%	Fixed	3/2023	63,607		43,748
Holiday Inn Manhattan 6th Avenue Chelsea	4.49%	Fixed	6/2023	78,268		78,555
Hyatt Place Austin Downtown	4.88%	Fixed	4/2024	56,271		56,263
Marriott Raleigh City Center ⁽ⁱ⁾	4.61%	Fixed	9/2038	51,335		51,317
				$	1,434,566	$	1,350,835

___________


(a)	These mortgage loans have variable interest rates, which have effectively been capped or converted to fixed rates through the use of interest rate caps or swaps (Note 8). The interest rates presented for these mortgage loans reflect the rate in effect at March 31, 2016 after giving effect to a related interest rate cap or swap, when applicable.


(b)	This mortgage loan has a one-year extension option, which is subject to certain conditions. The maturity date in the table does not reflect the extension option.


(c)	In connection with our assumption of this loan at the time of acquisition in May 2015, we recorded a fair market value adjustment that resulted in a premium of $7.5 million, which will be amortized over the remaining term of the loan. During the three months ended March 31, 2016, we recognized interest expense related to the premium of $0.9 million.


(d)	These mortgage loans each have two one-year extension options, all of which are subject to certain conditions. The maturity dates in the table do not reflect extension options


(e)	The debt is comprised of a senior mortgage loan for $49.0 million with an interest rate of 2.84% and a mezzanine loan for $21.0 million with an interest rate of 7.67%. The rates on both loans have effectively been capped through the use of interest rate caps and both loans have a maturity date of July 1, 2018.


(f)	During the first quarter of 2016, we completed a refinancing of this mortgage loan and recognized a loss of $0.7 million on the extinguishment of debt within the consolidated financial statements.


(g)	This mortgage loan has a five-year extension option, which is subject to certain conditions. The maturity date in the table does not reflect the extension option.


(h)	During the first quarter of 2016, we completed a refinancing of this mortgage loan and recognized a loss of $0.3 million on the extinguishment of debt within the consolidated financial statements.


(i)	The mortgage loan includes a call option by the lender, with the earliest repayment date being September 1, 2018.

Most of our mortgage loan agreements contain “lock-box” provisions, which permit the lender to access or sweep a hotel’s excess cash flow and would be triggered under limited circumstances, including the failure to maintain minimum debt service coverage ratios. If a provision were triggered, we would generally be permitted to spend an amount equal to our budgeted hotel operating expenses, taxes, insurance and capital expenditure reserves for the relevant hotel. The lender would then hold all excess cash flow after the payment of debt service in an escrow account until certain performance hurdles are met. At March 31, 2016, the minimum debt service coverage ratio for the Renaissance Chicago Downtown was not met, and therefore a cash management agreement was enacted that permits the lender to sweep the hotel’s excess cash flow.

Financing Activity During 2016

In connection with our 2016 Acquisition (Note 4), we obtained $46.5 million in non-recourse mortgage financing, with a fixed interest rate of 4.51% and a maturity date of March 1, 2021. We recognized $0.4 million of deferred financing costs related to this loan.

During the three months ended March 31, 2016, we refinanced two non-recourse mortgage loans totaling $123.0 million with new non-recourse mortgage loans totaling $164.0 million, which have a weighted-average interest rate of 3.80% and term of 5.2 years. We recognized a loss on extinguishment of debt totaling $1.0 million on these refinancings.

Covenants

Pursuant to our mortgage loan agreements, our consolidated subsidiaries are subject to various operational and financial covenants, including minimum debt service coverage ratios. At March 31, 2016, we were in compliance with the applicable covenants for each of our mortgage loans.

Senior Credit Facility

At December 31, 2015, we had a senior credit facility that provided for a $50.0 million senior unsecured revolving credit facility, or our Senior Credit Facility, inclusive of a $5.0 million letter of credit subfacility, and is used for the working capital needs of the Company and its subsidiaries, as well as for other general corporate purposes. On March 31, 2016, we amended our Senior Credit Facility, which reduced the capacity under the facility from $50.0 million to $35.0 million, and altered certain covenant calculations. As amended, our Senior Credit Facility continues to bear interest at the London Interbank Offered Rate, or LIBOR, plus 2.75%; however, if at any time the Company’s leverage ratio, as defined in the credit agreement, is greater than 65%, interest on loans under our Senior Credit Facility will increase to LIBOR plus 3.25%. Our Senior Credit Facility is scheduled to mature on December 4, 2017, but may be extended by us for one 12-month period, subject to the satisfaction of certain conditions and an extension fee of 0.25%.

At March 31, 2016, the outstanding balance under our Senior Credit Facility was $35.0 million. We pay a fee of 0.25% on the unused portion of our Senior Credit Facility.

The Credit Agreement includes customary financial maintenance covenants that require us to maintain certain ratios and benchmarks at the end of each quarter, as well as various customary affirmative and negative covenants as outlined in the First Amendment to Credit Agreement. We were in compliance with all applicable covenants at March 31, 2016.

Scheduled Debt Principal Payments

Scheduled debt principal payments during the remainder of 2016, each of the next four calendar years following December 31, 2016, and thereafter are as follows (in thousands):



Years Ending December 31,	Total
2016 (remainder)	$	5,401
2017	299,657
2018	218,436
2019	144,564
2020	191,852
Thereafter through 2038	615,200
	1,475,110
Deferred financing costs ^(a)	(10,015		)
Fair market value adjustment ^(b)	4,471
Total	$	1,469,566

__________


(a)	In accordance with ASU 2015-03, we reclassified deferred financing costs from Other assets to Non-recourse debt, net as of December 31, 2015 (Note 2).


(b)	Represents the unamortized premium recorded as of March 31, 2016 in connection with the assumption of the Ritz-Carlton Key Biscayne mortgage loan as part of the acquisition of the hotel in May 2015.