Long-Term Debt

6 Months Ended

Jun. 30, 2019

Long-term Debt, Unclassified [Abstract]

Long-Term Debt

6. Long-Term Debt

Long-term debt as of June 30, 2019 and December 31, 2018 consisted of the following (in thousands): 

	Origination	Original Principal Amount			Interest Rate	Principal Amortization Period	June 30,			December 31,
				Maturity			2019			2018
Unsecured:
Revolving credit facility(1)	July 2010	n/a		May 2022	Floating	n/a	$	—		$	—
Term loan(2)	April 2017	$	225,000	April 2022	Floating	n/a	225,000			225,000
Secured:
Boston Marriott Newton	May 2013	$	60,000	June 2020	3.63%	25	50,311			51,205
Le Meridien San Francisco	July 2013	$	92,500	August 2020	3.50%	25	77,792			79,180
Hilton Denver City Center(3)	July 2012	$	70,000	August 2022	4.90%	30	61,675			62,383
Hilton Checkers Los Angeles	February 2013	$	32,000	March 2023	4.11%	30	28,271			28,609
W Chicago – City Center	July 2013	$	93,000	August 2023	4.25%	25	79,517			80,815
Hyatt Herald Square New York/Hyatt Place New York Midtown South	July 2014	$	90,000	July 2024	4.30%	30	85,596			86,397
Hyatt Regency Boston	June 2016	$	150,000	July 2026	4.25%	30	142,314			143,471
							750,476			757,060
Unamortized deferred financing costs							(4,929		)	(5,671		)
Long-term debt							$	745,547		$	751,389

(1) The Trust may exercise an option to extend the maturity by one year, subject to certain customary conditions. As of June 30, 2019, the interest rate in effect was 3.90%. See below for additional information related to the revolving credit facility.

(2) The term loan bears interest equal to LIBOR plus 1.45% - 2.20% (the spread over LIBOR based on the Trust’s consolidated leverage ratio). Contemporaneous with the closing of the term loan, the Trust entered into an interest rate swap to fix LIBOR at 1.86% for the five-year term (as of June 30, 2019, the effective interest rate on the term loan was 3.31%). Under the terms of this interest rate swap, the Trust pays fixed interest of 1.86% per annum on a notional amount of $225.0 million and receives floating rate interest equal to one-month LIBOR. The effective date of this interest rate swap was April 21, 2017 and it will mature on April 21, 2022.

(3) The loan has a term of 30 years, but is callable by the lender after 10 years, and the Trust expects the lender to call the loan at that time. The indicated maturity is based on the date the loan is callable by the lender.

Unsecured revolving credit facility and term loan

On May 31, 2018, the Trust entered into an amended and restated credit agreement with a syndicate of banks to (1) extend the maturity date to May 2022 and (2) lower the interest rate to LIBOR plus 1.45% - 2.20% (the spread over LIBOR continues to be based on the Trust’s consolidated leverage ratio) for its revolving credit facility. The amended credit agreement provides for the possibility of further future increases, up to a maximum of $450.0 million, in accordance with the terms of the amended credit agreement. The amended credit agreement also provides for an extension of the maturity date by one year, subject to satisfaction of certain customary conditions.

On April 21, 2017, the Trust obtained a $225.0 million, five-year, unsecured term loan from a syndicate of banks. The term loan provides for the possibility of future increases, up to a maximum amount borrowed of $375.0 million, in accordance with the terms of the term loan agreement.

The amount that the Trust can borrow in the aggregate under the revolving credit facility and the term loan is based on the value of the Trust’s hotels included in the borrowing base, as defined in the amended credit agreement and the term loan agreement. As of June 30, 2019, the borrowing base included 11 of the Trust’s hotels providing borrowing availability of $300.0 million under the revolving credit facility, all of which remained available. The amended credit agreement and the term loan agreement contain financial covenants, including a leverage ratio and a minimum tangible net worth requirement, and additional financial covenants typically found in similar unsecured revolving credit facilities and term loans, including a consolidated secured debt ratio, an unsecured leverage ratio and an unsecured debt service coverage ratio.

Other

Certain of the Trust’s mortgage loan agreements contain standard financial covenants relating to coverage ratios and standard provisions that require loan servicers to maintain escrow accounts for certain items, including real estate taxes, property insurance premiums, and normal replacements of FF&E.

As of June 30, 2019, the Trust was in compliance with all financial covenants under its borrowing arrangements. As of June 30, 2019, the Trust’s weighted-average interest rate on its long-term debt was 3.90%. Future scheduled principal payments of debt obligations (assuming no exercise of extension options) as of June 30, 2019 are as follows (in thousands): 

Year	Amounts
2019	$	7,158
2020	135,326
2021	9,984
2022	291,635
2023	100,623
Thereafter	205,750
	$	750,476