8. Debt

Each of the Company’s mortgage loans is secured by a first-mortgage lien on the underlying property. The mortgages are non-recourse except for fraud or misapplication of funds. Mortgage debt consisted of the following (in thousands):


					Balance Outstanding as of
	Interest			Maturity	June 30,		December 31,
Collateral	Rate			Date	2011		2010
Courtyard by Marriott Altoona, PA		5.96	%	April 1, 2016	$	6,839	$	6,924
Springhill Suites by Marriott Washington, PA		5.84	%	April 1, 2015		5,335		5,408

					$	12,174	$	12,332

The Company estimates the fair value of its fixed rate debt by discounting the future cash flows of each instrument at estimated market rates. Rates take into consideration general market conditions and maturity. The estimated fair value of the Company’s debt in thousands as of June 30, 2011 and December 31, 2010 was $12,373 and $12,574, respectively.

On October 12, 2010, the Company entered into a $85 million senior secured revolving credit facility to fund future acquisition, redevelopment and expansion activities. At June 30, 2011, we had no outstanding borrowings under this credit facility. At June 30, 2011, there were eleven properties in the borrowing base under the credit agreement and the maximum borrowing availability under the revolving credit facility was $84.3 million.

The Company amended its $85 million senior secured revolving credit facility effective May 2011. The amendment provides for an increase to the allowable consolidated leverage ratio to 60 percent through 2012, reducing to 55 percent in 2013; and a decrease to the consolidated fixed charge coverage ratio from 2.3x to 1.7x through March 2012, increasing to 1.75x through December 2012 and 2.0x in 2013. Subject to certain conditions, the credit facility still has an accordion feature that provides the Company with the ability to increase the facility to $110 million, subject to lender approval. The Company paid $0.5 million in connection with this amendment.

As of June 30, 2011, the Company was in compliance with all of its financial covenants. Future scheduled principal payments of debt obligations as of June 30, 2011 are as follows (in thousands):


	Amount
2011 (remaining six months)	$	176
2012		354
2013		375
2014		398
2015		4,958
Thereafter		5,913

	$	12,174