Debt

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



	Encumbered	Interest	Maturity	September 30,		December 31,
	Hotels	Rate (%)	Date	2014		2013
Line of credit	8	LIBOR + 3.375	June 2016^(a)	$	146,500	$	88,000
Term loan	3	LIBOR + 2.50	July 2017	140,000		—
Mortgage debt	4	LIBOR + 3.00	March 2017	64,000		—
Mortgage debt^(b)	4	4.95	October 2022	124,930		126,220
Mortgage debt	1	4.94	October 2022	31,353		31,714
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^(c)
Construction tranche	—	LIBOR + 4.00	May 2016	44,577		—
Cash collateralized tranche	—	LIBOR + 1.25	May 2016	20,284		64,861
Retired debt	—	—	—	—		302,431
Total	35			$	1,621,644	$	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)

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 2014, we drew $44.6 million of the cash collateral to fund construction costs, leaving $20.3 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 a $10.9 million secured loan, otherwise maturing in July 2014, when we sold a hotel. In March 2014, we repaid a $17.1 million loan, secured by a hotel, otherwise maturing in June 2014. We incurred $251,000 of debt extinguishment costs in connection with repaying these loans.

In April 2014, we repaid a $15.6 million loan, secured by two hotels, otherwise maturing in July 2014. In May 2014, we repaid an additional $19.2 million loan, secured by a hotel, otherwise maturing in August 2014.

In July 2014, we obtained a $140 million term loan secured by three hotels. The loan bears interest at LIBOR (no floor) plus 2.5%. The loan matures in 2017 (it may be extended for up to two years, subject to satisfying certain conditions) and is freely pre-payable. We will use proceeds from pending and future asset sales to repay this loan and borrowings under our line of credit.

4. Debt — (continued)

In August 2014, we used proceeds from the July 2014 term loan, cash on hand and borrowings under our line of credit to repay the remaining $234 million of our 10% senior secured notes. These notes, which would have matured October 2014, were secured by 11 properties. We incurred $3.8 million of debt extinguishment costs in connection with repaying these notes. All cash paid to satisfy the extinguishment of the senior secured notes is classified as a financing activity in the statements of cash flows.

In September 2014, we repaid a $9.6 million secured loan, otherwise maturing in July 2016, when we sold a hotel. We incurred $914,000 of debt extinguishment costs in connection with repaying this loan.

We reported $21.9 million and $25.8 million of interest expense for the three months ended September 30, 2014 and 2013, respectively, which is net of: (i) interest income of $13,000 and $15,000 and (ii) capitalized interest of $4.1 million and $3.4 million, respectively. We reported $71.6 million and $78.5 million of interest expense for the nine months ended September 30, 2014 and 2013, respectively, which is net of: (i) interest income of $41,000 and $60,000 and (ii) capitalized interest of $12.4 million and $9.1 million, respectively.