XML 27 R16.htm IDEA: XBRL DOCUMENT v3.19.2
Indebtedness
6 Months Ended
Jun. 30, 2019
Debt Disclosure [Abstract]  
Indebtedness Indebtedness
Indebtedness consisted of the following (in thousands):
Indebtedness
 
Collateral
 
Maturity
 
Interest Rate
 
June 30, 2019
 
December 31, 2018
Secured credit facility (3)
 
None
 
September 2019
 
Base Rate (2) + 1.65% or LIBOR (1) + 2.65%
 
$

 
$

Mortgage loan (4)
 
1 hotel
 
July 2019
 
LIBOR (1) + 4.15%
 
35,200

 
35,200

Mortgage loan (4)
 
8 hotels
 
July 2019
 
LIBOR (1) + 4.09%
 
144,000

 
144,000

Mortgage loan (5)
 
1 hotel
 
July 2019
 
4.00%
 

 
5,232

Mortgage loan (6)
 
1 hotel
 
August 2019
 
LIBOR (1) + 4.95%
 
7,778

 
7,778

Mortgage loan (7)
 
17 hotels
 
November 2019
 
LIBOR (1) + 3.00%
 
427,000

 
427,000

Mortgage loan (7)
 
8 hotels
 
February 2020
 
LIBOR (1) + 2.92%
 
395,000

 
395,000

Mortgage loan (7) (8)
 
21 hotels
 
April 2020
 
LIBOR (1) + 3.20%
 
962,575

 
962,575

Mortgage loan (9)
 
1 hotel
 
May 2020
 
LIBOR (1) + 2.90%
 
16,100

 
16,100

Mortgage loan (10)
 
1 hotel
 
June 2020
 
LIBOR (1) + 5.10%
 
43,750

 
43,750

Mortgage loan (7)
 
7 hotels
 
June 2020
 
LIBOR (1) + 3.65%
 
180,720

 
180,720

Mortgage loan (7)
 
7 hotels
 
June 2020
 
LIBOR (1) + 3.39%
 
174,400

 
174,400

Mortgage loan (7)
 
5 hotels
 
June 2020
 
LIBOR (1) + 3.73%
 
221,040

 
221,040

Mortgage loan (7)
 
5 hotels
 
June 2020
 
LIBOR (1) + 4.02%
 
262,640

 
262,640

Mortgage loan (7)
 
5 hotels
 
June 2020
 
LIBOR (1) + 2.73%
 
160,000

 
160,000

Mortgage loan (7)
 
5 hotels
 
June 2020
 
LIBOR (1) + 3.68%
 
215,120

 
215,120

Mortgage loan
 
1 hotel
 
November 2020
 
6.26%
 
92,494

 
93,433

Mortgage loan (11)
 
1 hotel
 
November 2020
 
LIBOR (1) + 2.55%
 
25,000

 
25,000

Mortgage loan (12)
 
2 hotels
 
March 2021
 
LIBOR (1) + 2.75%
 
240,000

 

Mortgage loan (9)
 
1 hotel
 
February 2022
 
LIBOR (1) + 3.90%
 
145,000

 

Mortgage loan (12)
 
2 hotels
 
June 2022
 
LIBOR (1) + 3.00%
 

 
178,099

Mortgage loan
 
1 hotel
 
November 2022
 
LIBOR (1) + 2.00%
 
97,000

 
97,000

Mortgage loan
 
1 hotel
 
May 2023
 
5.46%
 
52,346

 
52,843

Mortgage loan
 
1 hotel
 
June 2023
 
LIBOR (1) + 2.45%
 
73,450

 
73,450

Mortgage loan
 
1 hotel
 
January 2024
 
5.49%
 
6,821

 
6,883

Mortgage loan
 
1 hotel
 
January 2024
 
5.49%
 
9,957

 
10,045

Mortgage loan
 
1 hotel
 
May 2024
 
4.99%
 
6,353

 
6,414

Mortgage loan (5)
 
1 hotel
 
June 2024
 
LIBOR (1) + 2.00%
 
8,881

 

Mortgage loan
 
3 hotels
 
August 2024
 
5.20%
 
64,808

 
65,242

Mortgage loan
 
2 hotels
 
August 2024
 
4.85%
 
11,963

 
12,048

Mortgage loan
 
3 hotels
 
August 2024
 
4.90%
 
23,917

 
24,086

Mortgage loan
 
2 hotels
 
February 2025
 
4.45%
 
19,669

 
19,835

Mortgage loan
 
3 hotels
 
February 2025
 
4.45%
 
50,875

 
51,304

Mortgage loan
 
1 hotel
 
March 2025
 
4.66%
 
25,162

 

 
 
 
 
 
 
 
 
4,199,019

 
3,966,237

Premiums, net
 
 
 
 
 
 
 
766

 
1,293

Deferred loan costs, net
 
 
 
 
 
 
 
(32,765
)
 
(40,264
)
Indebtedness, net
 
 
 
 
 
 
 
$
4,167,020

 
$
3,927,266

 
 

 
 
 

 


 


Indebtedness related to assets held for sale, net (8)
 
1 hotel
 
April 2020
 
LIBOR (1) + 3.20%
 
23,063

 

Indebtedness, net
 
 
 
 
 
 
 
$
4,143,957

 
$
3,927,266

_____________________________
(1) 
LIBOR rates were 2.398% and 2.503% at June 30, 2019 and December 31, 2018, respectively.
(2) 
Base Rate, as defined in the secured credit facility agreement, is the greater of (i) the prime rate set by Bank of America, or (ii) federal funds rate + 0.5%, or (iii) LIBOR + 1.0%.
(3) 
The secured credit facility has borrowing capacity of up to $100.0 million.
(4)  
This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions. The second one-year extension period began in July 2019.
(5) 
On June 7, 2019, we amended this mortgage loan totaling $5.2 million. The amended mortgage loan totaling $8.9 million has a five year term, is interest only and bears interest at a rate of LIBOR +2.00%.
(6) 
This mortgage loan has two one-year extension options subject to satisfaction of certain conditions. The first one-year extension period began in August 2018.
(7) 
This mortgage loan has five one-year extension options, subject to satisfaction of certain conditions.
(8) 
A portion of this mortgage loan at June 30, 2019 relates to the Marriott San Antonio. See note 6.
(9) 
This mortgage loan has two one-year extension options, subject to satisfaction of certain conditions.
(10) 
This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions. The third one-year extension period began in June 2019.
(11) 
This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions.
(12) 
On March 5, 2019, we refinanced this mortgage loan totaling $178.1 million with a new $240.0 million mortgage loan with a two-year initial term and five one-year extension options, subject to the satisfaction of certain conditions. The new mortgage loan is interest only and bears interest at a rate of LIBOR + 2.75%.
On January 17, 2018, we refinanced our $376.8 million mortgage loan. The new mortgage loan totaled $395.0 million. The new mortgage loan has a two-year initial term and five one-year extension options, subject to the satisfaction of certain conditions. The mortgage loan is interest only and provides for an interest rate of LIBOR + 2.92%. The new mortgage loan is secured by eight hotels: Embassy Suites Portland, Embassy Suites Crystal City, Embassy Suites Orlando, Embassy Suites Santa Clara, Crowne Plaza Key West, Hilton Costa Mesa, Sheraton Minneapolis, and Historic Inns of Annapolis.
On February 20, 2018, we repaid $7.6 million of principal on our mortgage loan partially secured by the SpringHill Suites Glen Allen. This hotel property was sold on February 20, 2018. See note 6.
On April 9, 2018, we refinanced our $971.7 million mortgage loan secured by 22 hotel properties. The new mortgage loan totaled $985.0 million, is interest only and provides for an interest rate of LIBOR + 3.20%. The stated maturity is April 2020 with five one-year extension options, subject to the satisfaction of certain conditions. The new mortgage loan is secured by the same 22 hotel properties that include: the Courtyard Boston Downtown, Courtyard Denver, Courtyard Gaithersburg, Courtyard Savannah, Hampton Inn Parsippany, Hilton Parsippany, Hilton Tampa, Hilton Garden Inn Austin, Hilton Garden Inn BWI, Hilton Garden Inn Virginia Beach, Hyatt Windwatch Long Island, Hyatt Savannah, Marriott DFW Airport, Marriott Omaha, Marriott San Antonio, Marriott Sugarland, Renaissance Palm Springs, Ritz-Carlton Atlanta, Residence Inn Tampa, Churchill, Melrose and Silversmith.
On May 1, 2018, we repaid $6.6 million of principal on our mortgage loan partially secured by the SpringHill Suites Centreville. This hotel property was sold on May 1, 2018. See note 6.
On May 10, 2018, we repaid $22.5 million of principal on our mortgage loan partially secured by the Residence Inn Tampa. This hotel property was sold on May 10, 2018. See note 6.
On June 13, 2018, we refinanced seven mortgage loans with existing outstanding balances totaling $1.068 billion. The new financing is comprised of six separate mortgage loans that total approximately $1.270 billion. Each has a two-year initial term with five one-year extension options, subject to the satisfaction of certain conditions. The original principal amounts of each mortgage loan and the hotel properties securing each mortgage loan are set forth in the following table:
Mortgage Loan
 
Principal Amount (in thousands)
 
Interest Rate
 
Secured Hotel Properties
A
 
$180,720
 
LIBOR + 3.65%
 
Courtyard Columbus Tipton Lakes
 
 
 
 
 
 
Courtyard Scottsdale Old Town
 
 
 
 
 
 
Residence Inn Phoenix Airport
 
 
 
 
 
 
SpringHill Suites Manhattan Beach
 
 
 
 
 
 
SpringHill Suites Plymouth Meeting
 
 
 
 
 
 
Residence Inn Las Vegas Hughes Center
 
 
 
 
 
 
Residence Inn Newark
B
 
$174,400
 
LIBOR + 3.39%
 
Courtyard Newark
 
 
 
 
 
 
SpringHill Suites BWI
 
 
 
 
 
 
Courtyard Oakland Airport
 
 
 
 
 
 
Courtyard Plano Legacy
 
 
 
 
 
 
Residence Inn Plano
 
 
 
 
 
 
TownePlace Suites Manhattan Beach
 
 
 
 
 
 
Courtyard Basking Ridge
C
 
$221,040
 
LIBOR + 3.73%
 
Sheraton San Diego Mission Valley
 
 
 
 
 
 
Sheraton Bucks County
 
 
 
 
 
 
Hilton Ft. Worth
 
 
 
 
 
 
Hyatt Regency Coral Gables
 
 
 
 
 
 
Hilton Minneapolis
D
 
$262,640
 
LIBOR + 4.02%
 
Hilton Santa Fe
 
 
 
 
 
 
Embassy Suites Dulles
 
 
 
 
 
 
Marriott Beverly Hills
 
 
 
 
 
 
One Ocean
 
 
 
 
 
 
Marriott Suites Dallas Market Center
E (1)
 
$216,320
 
LIBOR + 4.36%
 
Marriott Memphis East
 
 
 
 
 
 
Embassy Suites Philadelphia Airport
 
 
 
 
 
 
Sheraton Anchorage
 
 
 
 
 
 
Lakeway Resort & Spa
 
 
 
 
 
 
Marriott Fremont
F
 
$215,120
 
LIBOR + 3.68%
 
W Atlanta Downtown
 
 
 
 
 
 
Embassy Suites Flagstaff
 
 
 
 
 
 
Embassy Suites Walnut Creek
 
 
 
 
 
 
Marriott Bridgewater
 
 
 
 
 
 
Marriott Durham Research Triangle Park

_____________________________
(1) On July 3, 2018, we purchased $56.3 million of mezzanine debt related to the Pool E loan that was issued in conjunction with the June 13, 2018 refinancing. The net interest rate after the purchase of the Pool E loan is LIBOR + 2.73%.
On June 29, 2018, in connection with the acquisition of the Hilton Alexandria Old Town in Alexandria Virginia, we completed the financing of a $73.5 million mortgage loan. This mortgage loan is interest only and provides for an interest rate of LIBOR + 2.45%. The stated maturity date of the mortgage loan is June 2023, with no extension options. The mortgage loan is secured by the Hilton Alexandria Old Town.
On July 3, 2018, we purchased $56.3 million of mezzanine debt related to the Pool E loan that was issued in conjunction with the June 13, 2018 refinancing. The net interest rate after the purchase of the Pool E loan is LIBOR + 2.73%. The mezzanine debt receivable purchase and corresponding mezzanine debt eliminate in consolidation.
On September 27, 2018, we established a secured credit facility with a borrowing capacity of up to $100.0 million, which is secured by a pledge of 100% of the equity interests in the subsidiaries that own the hotel property for which revolving credit facility funds would be used to acquire. The interest rate associated with the secured credit facility is either the base rate + 1.65% or LIBOR + 2.65% at the Company’s election. The base rate is the greater of (i) the prime rate set by Bank of America; (ii) federal funds rate + 0.5%; or (iii) LIBOR + 1.0%.
On November 8, 2018, in connection with the acquisition of the La Posada de Santa Fe, we completed the financing of a $25.0 million mortgage loan. This mortgage loan is interest only and provides for an interest rate of LIBOR + 2.55%. The stated maturity date of the mortgage loan is November 2020, with three one-year extension options. The mortgage loan is secured by the La Posada de Santa Fe.
On January 22, 2019, in connection with the acquisition of the Embassy Suites New York Manhattan Times Square, we completed the financing of a $145.0 million mortgage loan. This mortgage loan is interest only and provides for an interest rate of LIBOR + 3.90%. The stated maturity date of the mortgage loan is February 2022, with two one-year extensions. The mortgage loan is secured by the Embassy Suites New York Manhattan Times Square.
On February 26, 2019, in connection with the acquisition of the Hilton Santa Cruz/Scotts Valley, we assumed a $25.3 million non-recourse mortgage loan with a fair value of $24.9 million. This mortgage loan amortizes monthly and provides for a fixed interest rate of 4.66%. The stated maturity date is March 2025. The mortgage loan is secured by the Hilton Santa Cruz/Scotts Valley.
On March 5, 2019, we refinanced our $178.1 million mortgage loan, secured by the Renaissance Nashville and Westin Princeton. The new mortgage loan totals $240.0 million. The new mortgage loan is interest only and provides for an interest rate of LIBOR + 2.75%. The stated maturity is March 2021 with five one-year extension options, subject to the satisfaction of certain conditions. The mortgage loan is secured by the Renaissance Nashville and Westin Princeton.
On June 7, 2019, we amended the mortgage loan secured by the Fort Worth Ashton totaling $5.2 million. The amended mortgage loan totaling $8.9 million has a five-year term, is interest only and bears interest at a rate of LIBOR + 2.00%.
During the three and six months ended June 30, 2019 and 2018, we recognized net premium amortization as presented in the table below (in thousands):
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
Line Item
 
2019
 
2018
 
2019
 
2018
Interest expense and amortization of premium and loan costs
 
$
55

 
$
69

 
$
120

 
$
138


The amortization of the net premium is computed using a method that approximates the effective interest method, which is included in “interest expense and amortization of premiums and loan costs” in the consolidated statements of operations.
We are required to maintain certain financial ratios under various debt and related agreements. If we violate covenants in any debt or related agreement, we could be required to repay all or a portion of our indebtedness before maturity at a time when we might be unable to arrange financing for such repayment on attractive terms, if at all. The assets of certain of our subsidiaries are pledged under non-recourse indebtedness and are not available to satisfy the debts and other obligations of Ashford Trust or Ashford Trust OP, our operating partnership, and the liabilities of such subsidiaries do not constitute the obligations of Ashford Trust or Ashford Trust OP. As of June 30, 2019, we were in compliance in all material respects with all covenants or other requirements set forth in our debt and related agreements as amended.