Debt

The Company's debt consisted of the following (in thousands):



					Outstanding Borrowings at
	Number of Assets Encumbered	Interest Rate	Maturity Date		December 31, 2019			December 31, 2018
Senior notes (1)(2)(3)	—	6.00%	June 2025		$	500,484		$	505,322
Mortgage loan (4)	3	4.95%	October 2022		89,299			91,737
Mortgage loan (5)	1	4.94%	October 2022		28,785			29,569
Mortgage loan (1)(6)	3	3.36%	April 2024	(7)	96,000			—
	7				714,568			626,628
Deferred financing costs, net					(841		)	—
Debt, net					$	713,727		$	626,628


(1)	Requires payments of interest only through maturity.


(2)	The Senior Notes (as defined below) include $25.6 million and $30.3 million at December 31, 2019 and 2018, respectively, related to fair value adjustments that RLJ pushed down to the Company's consolidated financial statements as a result of the Mergers.


(3)	The Company has the option to redeem the Senior Notes beginning June 1, 2020 at a price of 103.0% of face value.


(4)	Includes $1.4 million and $1.9 million at December 31, 2019 and 2018, respectively, related to fair value adjustments on the mortgage loans that RLJ pushed down to the Company's consolidated financial statements as a result of the Mergers.


(5)	Includes $0.4 million and $0.6 million at December 31, 2019 and 2018, respectively, related to a fair value adjustment on the mortgage loan that RLJ pushed down to the Company's consolidated financial statements as a result of the Mergers.


(6)	The hotels encumbered by the mortgage loan are cross-collateralized.


(7)	In April 2019, the Company entered into a new mortgage loan that bears interest at LIBOR + 1.60% and provides two one year extension options.

The 6.000% Senior Notes due 2025 (the "Senior Notes") contain certain financial covenants relating to the Company's total leverage ratio, secured leverage ratio, and interest coverage ratio. If an event of default exists, the Company is not permitted to (i) incur additional indebtedness, except to refinance maturing debt with replacement debt, as defined under our indentures; (ii) pay dividends in excess of the minimum distributions required to qualify as a REIT; (iii) repurchase capital stock; or (iv) merge. As of December 31, 2019 and 2018, the Company was in compliance with all financial covenants.

Certain mortgage agreements are subject to customary financial covenants. The Company was in compliance with all financial covenants at December 31, 2019 and 2018.

Interest Expense

During the years ended December 31, 2019 and 2018, the Company recognized $31.9 million and $37.9 million of interest expense, respectively.

During the Successor period of September 1, 2017 through December 31, 2017, the Company recognized $19.3 million of interest expense. During the Predecessor period of January 1, 2017 through August 31, 2017, the Company recognized $51.7 million of interest expense, which is net of capitalized interest of $1.1 million.

Future Minimum Principal Payments

As of December 31, 2019, the future minimum principal payments were as follows (in thousands):



2020	$	2,461
2021	2,824
2022	110,997
2023	—
2024	96,000
Thereafter	474,888
Total (1)	$	687,170


(1)	Excludes a total of $27.4 million related to fair value adjustments on debt.