Note 8: Debt

Debt balances, including obligations for capital leases, and associated interest rates as of December 31, 2017 were:

			Principal balance as of
	Interest Rate
	at December 31, 2017	Maturity Date	December 31, 2017			December 31, 2016
			(in millions)
SF CMBS Loan	4.11%	November 2023	$	725		$	725
HHV CMBS Loan	4.20%	November 2026		1,275			1,275
Mortgage loans	Average rate of 4.08%	2020 to 2026⁽¹⁾		207			207
Term Loan	L + 1.45%	December 2021		750			750
Revolving Credit Facility⁽²⁾	L + 1.50%	December 2021⁽¹⁾		—			—
Unsecured notes	N/A	December 2017		—			55
Capital lease obligations	Average rate of 7.00%	2019 to 2094		16			14
				2,973			3,026
Less: unamortized deferred financing costs and discount				(12	)		(14	)
			$	2,961		$	3,012

⁽¹⁾	Assumes the exercise of all extensions that are exercisable solely at our option.

⁽²⁾	$1 billion available.

CMBS Loans and Mortgage Loans

In October 2016, we entered into a $725 million CMBS loan secured by the Hilton San Francisco Union Square and the Parc 55 Hotel San Francisco (“SF CMBS Loan”) and a $1.275 billion CMBS loan secured by the Hilton Hawaiian Village (“HHV CMBS Loan”). Both the SF CMBS Loan and the HHV CMBS Loan bear interest at a fixed-rate and require interest-only payments through their respective maturity dates. At any time after the permitted release date of May 1, 2019, or earlier subject to certain conditions, the SF CMBS Loan and HHV CMBS Loan may be partially or fully prepaid, subject to prepayment penalties.

Our mortgage loans, which are associated with our three consolidated VIEs, bear interest at either a fixed-rate or variable rate and require interest-only loans payments their respective maturity dates.

We are required to deposit with the lender certain cash reserves for restricted uses. As of December 31, 2017 and 2016, our consolidated balance sheets included $14 million and $13 million, respectively, of restricted cash related to our CMBS loans and mortgage loans.

Credit Facilities

In December 2016, we entered into a credit agreement (“Credit Agreement”) with Wells Fargo Bank, National Association as administrative agent, and certain others financial institutions party thereto as lenders. The facility includes a $1 billion revolving credit facility (“Revolver”), which has a scheduled maturity date of December 24, 2020 with two, six-month extension options if certain conditions are satisfied, and a $750 million term loan (“Term Loan”). The Credit Agreement includes the option to increase the size of the Revolver and enter into additional incremental term loan credit facilities, subject to certain limitations, in an aggregate commitment or principal amount not to exceed $500 million for all such increases.

The Revolver permits one or more standby letters of credit, up to a maximum aggregate outstanding balance of $50 million, to be issued on behalf of us. Any outstanding standby letters of credit reduce the available borrowings on the Revolver by a corresponding amount.

Revolver and Term Loan borrowings bear interest at variable rates at our option, based upon either a base rate or LIBOR rate, plus an applicable margin based on our leverage ratio. We incur an unused facility fee on the Revolver of between 0.2% and 0.3%, based on our level of usage.

The Credit Agreement contains certain financial covenants relating to our maximum leverage ratio, minimum fixed charge coverage ratio, maximum secured indebtedness, maximum unsecured indebtedness and minimum unsecured interest coverage ratio. If an event of default exists, we are not permitted to make distributions to shareholders, other than those required to qualify for and maintain REIT status.

Debt Maturities

The contractual maturities of our debt as of December 31, 2017 were:

Year	(in millions)
2018	$	—
2019		—
2020⁽¹⁾		12
2021		750
2022		33
Thereafter		2,178
	$	2,973

⁽¹⁾	Assumes the exercise of all extensions that are exercisable solely at our option.

Unsecured Notes

We repaid in full our unsecured notes upon maturity in December 2017.