Debt

Credit Facilities

The Company has in place the following unsecured credit agreements:


•	$300.0 million revolving credit facility with a scheduled maturity date of November 20, 2016 with a one-year extension option if certain conditions are satisfied (the "Revolver");


•	$400.0 million term loan with a scheduled maturity date of March 20, 2019 (which was originally scheduled to mature in 2017) (the "2012 Five-Year Term Loan");


•	$225.0 million term loan with a scheduled maturity date of November 20, 2019 (the "2012 Seven-Year Term Loan");


•	$400.0 million term loan with a scheduled maturity date of August 27, 2018 (the "2013 Five-Year Term Loan"); and


•	$150.0 million term loan with a scheduled maturity date of January 22, 2022 (the "2014 Seven-Year Term Loan").

The 2014 Seven-Year Term loan, the 2012 Five-Year Term Loan, the 2012 Seven-Year Term Loan and the 2013 Five-Year Term Loan are collectively the "Term Loans". The credit agreements for these loans require that a group of no less than 20 of the Company’s hotel properties remain unencumbered by outstanding indebtedness. The credit agreements contain certain financial covenants relating to the Company’s maximum leverage ratio, minimum fixed charge coverage ratio, minimum tangible net worth and maximum secured indebtedness. If an event of default exists, the Company is not permitted to make distributions to shareholders, other than those required to qualify for and maintain REIT status. As of December 31, 2014, the Company was in compliance with all financial covenants.

In 2012, the Company incurred $5.2 million in fees related to the Revolver, the 2012 Five-Year Term Loan and the 2012 Seven-Year Term Loan. In 2013, the Company incurred $3.0 million in fees related to the 2013 Five-Year Term Loan and the Seven-Year Term Loan amendment. In 2014, the Company incurred $2.9 million in fees related to the 2014 Seven-Year Term Loan and the amendments of the 2012 Five-Year Term Loan and the 2013 Five-Year Term Loan.

Borrowings under the Revolver and Term Loans bear interest at variable rates equal to the London InterBank Offered Rate (“LIBOR”) plus an applicable margin. The margin ranges from 1.65% to 3.00%, depending on the Company’s leverage ratio, as calculated under the terms of each facility. The Company incurs an unused facility fee on the Revolver of between 0.25% and 0.35%, based on the amount by which the maximum borrowing amount exceeds the total principal balance of outstanding borrowings.

Under the terms of the credit agreement for the Revolver, one or more standby letters of credit, up to a maximum aggregate outstanding balance of $30.0 million, may be issued on behalf of the Company by the lenders under the Revolver. The Company will incur a fee of 0.125% of the value of each standby letter of credit that is issued on its behalf. Any outstanding standby letters of credit reduce the available borrowings on the Revolver by a corresponding amount. No standby letters of credit were outstanding at December 31, 2014. The Company also may borrow up to a maximum aggregate outstanding balance of $40.0 million of swingline loans. Any outstanding swingline loans reduce the available borrowings under the Revolver by a corresponding amount. No swingline loans were outstanding at December 31, 2014.

As of December 31, 2014 and for the years ended December 31, 2014, 2013 and 2012, details of the credit facilities are as follows (in thousands):



					Interest expense for the year ended December 31,
	Outstanding borrowings at December 31, 2014		Maturity Date	Interest Rate at December 31, 2014 (1)	2014		2013		2012
Revolver (2)(3)	$	—	November 2016	n/a	$	1,177	$	1,222	$	158
2013 Five-Year Term Loan (4)	400,000		August 2018	3.07%	12,264		3,850		—
2012 Five-Year Term Loan (5)	400,000		March 2019	2.37%	6,902		5,453		662
2012 Seven-Year Term Loan (6)	225,000		November 2019	4.04%	9,217		5,049		359
2014 Seven-Year Term Loan (7)	—		January 2022	n/a	—		—		—
Prior Credit Facility (8)	—			n/a	—		—		2,345
Total	$	1,025,000			$	29,560	$	15,574	$	3,524

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(1)	Interest rate at December 31, 2014 gives effect to interest rate hedges and LIBOR floors, as applicable.


(2)	At December 31, 2014 there was $300.0 million of borrowing capacity on the Revolver.


(3)	Includes the unused facility fee of $1.0 million, $1.0 million and $0.1 million for the years ended December 31, 2014, 2013 and 2012, respectively.


(4)	Includes interest expense related to an interest rate hedge of $5.1 million and $1.6 million for years ended December 31, 2014 and 2013, respectively.


(5)	Includes interest expense related to an interest rate hedge of $0.2 million for the year ended December 31, 2014.


(6)	Includes interest expense related to an interest rate hedge of $4.2 million and $1.3 million for years ended December 31, 2014 and 2013, respectively.


(7)	At December 31, 2014 there was $150.0 million of borrowing capacity on the 2014 Seven-Year Term Loan.


(8)	The Company entered into an unsecured revolving credit facility (the "Prior Credit Facility") on June 20, 2011. On November 20, 2012, the Prior Credit Facility was amended and restated in its entirety and replaced with the Revolver and 2012 Five-Year Term Loan. Includes the unused facility fee of $0.7 million for the year ended December 31, 2012.

Mortgage Loans

As of December 31, 2014 and December 31, 2013, the Company was subject to the following mortgage loans (in thousands):




						Principal balance at,
Lender	Number of Assets Encumbered	Interest Rate at December 31, 2014 (1)		Maturity Date		December 31, 2014		December 31, 2013
Capmark Financial Group	1	5.55%		May 2015	(2)	$	10,513	$	10,916
Capmark Financial Group	1	5.55%		June 2015	(2)	4,561		4,736
Barclay's Bank	12	5.55%		June 2015	(2)	107,544		111,632
Barclay's Bank	4	5.60%		June 2015	(2)	26,775		27,804
Capmark Financial Group	1	5.50%		July 2015	(2)	6,214		6,450
Barclay's Bank	1	5.44%		Sept 2015	(2)	10,140		10,521
PNC Bank (3)	5	2.51%	(4)	May 2016	(5)	74,000		85,000
Wells Fargo (6)	4	4.19%	(4)	Sept 2016	(7)	150,000		150,000
Wells Fargo	4	4.06%	(4)	October 2017	(7)	143,000		—
Wells Fargo				October 2014		—		142,000
Capmark Financial Group				April 2015		—		4,068
Barclay's Bank				June 2015		—		2,475
Barclay's Bank				June 2015		—		4,063
	33					$	532,747	$	559,665

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(1)	Interest rate at December 31, 2014 gives effect to interest rate hedges and LIBOR floors, as applicable.


(2)	The Company is currently evaluating its options for repayment of these mortgage loans.


(3)	The five hotels encumbered by the PNC Bank loan are cross-collateralized.


(4)	Requires payments of interest only until the commencement of the extension period(s).


(5)	Maturity date may be extended for one one-year term at the Company’s option, subject to certain lender requirements.


(6)	Two of the four hotels encumbered by the Wells Fargo loans are cross-collateralized.


(7)	Maturity date may be extended for four one-year terms at the Company’s option, subject to certain lender requirements.

Some mortgage agreements are subject to customary financial covenants. The Company was in compliance with these

covenants at December 31, 2014 and December 31, 2013.

Future Minimum Principal Payments

As of December 31, 2014, future minimum principal payments on debt were as follows (in thousands):



2015	$	165,747
2016	224,000
2017	143,000
2018	400,000
2019	625,000
Thereafter	—
	$	1,557,747