Debt

Consolidated debt consisted of the following (dollars in thousands):



	Encumbered	Interest	Maturity	June 30,		December 31,
	Hotels	Rate (%)	Date	2014		2013
Line of credit	8	LIBOR + 3.375	June 2016^(a)	$	87,500	$	88,000
Hotel mortgage debt
Mortgage debt	1	5.81	July 2016	9,641		9,904
Mortgage debt^(b)	4	4.95	October 2022	125,404		126,220
Mortgage debt	1	4.94	October 2022	31,471		31,714
Senior notes
Senior secured notes^(c)	11	10.00	October 2014	232,289		229,190
Senior secured notes	6	6.75	June 2019	525,000		525,000
Senior secured notes	9	5.625	March 2023	525,000		525,000
Knickerbocker loan^(d)
Construction tranche	—	LIBOR + 4.00	May 2016	12,994		—
Cash collateralized tranche	—	LIBOR + 1.25	May 2016	51,867		64,861
Retired debt	—	—	—	—		63,337
Total	40			$	1,601,166	$	1,663,226


(a)	Our $225 million line of credit can be extended for one year (to 2017), subject to satisfying certain conditions.


(b)	This debt is comprised of separate non-cross-collateralized loans each secured by a mortgage of a different hotel.


(c)	We originally issued $636 million (face amount) of these notes. After redemptions in 2011 and 2012, $234 million (face amount) of these notes were outstanding at June 30, 2014 and December 31, 2013.

(d)

In November 2012, we obtained an $85.0 million construction loan to finance the redevelopment of the Knickerbocker Hotel. This loan can be extended for one year subject to satisfying certain conditions. In January 2014, we drew $13.0 million of the cash collateral to fund construction costs, leaving $51.9 million of cash collateral to be drawn before drawing on the remaining $20.1 million available under the construction loan.

In January 2014, we repaid $10.9 million of secured loan debt, scheduled to mature in July 2014, when we sold a hotel. In March 2014, we repaid an additional $17.1 million of debt, secured by a hotel, scheduled to mature in June 2014. We incurred $251,000 of debt extinguishment costs with these repayments.

In April 2014, we repaid $15.6 million of debt, secured by two hotels, scheduled to mature in July 2014. In May 2014, we paid an additional $19.2 million of debt, secured by a hotel, scheduled to mature in August 2014.

We reported $24.5 million and $26.4 million of interest expense for the three months ended June 30, 2014 and 2013, respectively, which is net of: (i) interest income of $14,000 and $22,000 and (ii) capitalized interest of $4.3 million and $2.9 million, respectively. We reported $49.7 million and $52.7 million of interest expense for the six months ended June 30, 2014 and 2013, respectively, which is net of: (i) interest income of $29,000 and $45,000 and (ii) capitalized interest of $8.3 million and $5.7 million, respectively.

3. Debt — (continued)

During July, we obtained a $140 million term loan secured by three hotels. Borrowings under the facility bear interest at LIBOR (no floor) plus 2.5%. The loan matures in 2017 (may be extended for up to two years, subject to satisfaction of certain conditions) and is freely pre-payable. On August 15, 2014, we expect to use borrowings from the term loan, cash on hand and borrowings under our line of credit to repay the remaining $234 million of our maturing 10% senior secured notes. We will use proceeds from pending and future asset sales to repay the term loan and our line of credit.