Chatham Lodging Trust Debt Disclosure
| 6. | Debt |
The Company's mortgage loans are collateralized by first-mortgage liens on certain of the Company's properties. The mortgages are non-recourse except for instances of fraud or misapplication of funds. Debt consisted of the following (in thousands):
| December 31, 2025 | ||||||||||||||||||
| Property | Balance Outstanding as of | |||||||||||||||||
| Interest | Carrying | December 31, | December 31, | |||||||||||||||
| Loan/Collateral | Rate | Maturity Date | Value | 2025 | 2024 | |||||||||||||
| Revolving Credit Facility (1) | 5.52 | % | September 25, 2029 | $ | — | $ | — | $ | 110,000 | |||||||||
| Unsecured Term Loan (2) | 5.47 | % | September 25, 2029 | — | 200,000 | 140,000 | ||||||||||||
| Hampton Inn & Suites Houston-Medical Center, TX | 4.25 | % | January 6, 2025 | — | — | 15,957 | ||||||||||||
| Courtyard by Marriott Dallas, TX | 7.61 | % | September 11, 2028 | 38,403 | 24,500 | 24,500 | ||||||||||||
| Hyatt Place Pittsburgh, PA (3) | 7.29 | % | June 11, 2029 | 28,825 | 23,300 | 23,300 | ||||||||||||
| Residence Inn by Marriott Austin, TX | 7.42 | % | September 6, 2033 | 34,844 | 20,850 | 20,850 | ||||||||||||
| TownePlace Suites by Marriott Austin, TX | 7.42 | % | September 6, 2033 | 28,889 | 19,075 | 19,075 | ||||||||||||
| Courtyard by Marriott Summerville, SC | 7.33 | % | September 11, 2033 | 17,524 | 9,000 | 9,000 | ||||||||||||
| Residence Inn by Marriott Summerville, SC | 7.33 | % | September 11, 2033 | 16,549 | 9,500 | 9,500 | ||||||||||||
| SpringHill Suites by Marriott Savannah, GA (4) | 6.70 | % | June 6, 2034 | 31,854 | 22,000 | 22,000 | ||||||||||||
| Hampton Inn & Suites Exeter, NH (4) | 6.70 | % | June 11, 2034 | 11,938 | 15,000 | 15,000 | ||||||||||||
| Total debt before unamortized debt issue costs | $ | 208,826 | $ | 343,225 | $ | 409,182 | ||||||||||||
| Unamortized term loan and mortgage debt issue costs | (4,312 | ) | (2,332 | ) | ||||||||||||||
| Total debt outstanding | $ | 338,913 | $ | 406,850 | ||||||||||||||
| 1. | The interest rate for the revolving credit facility is variable and based on one-month term secured overnight financing rate ("") plus a spread of 1.50% to 2.25% based on the Company's leverage. |
| 2. | The interest rate for the unsecured term loan is variable and based on one-month term SOFR plus a spread of 1.45% to 2.20% based on the Company's leverage. |
| 3. | On May 31, 2024, a subsidiary of Chatham entered into an agreement with Wells Fargo Bank to obtain a $23.3 million loan secured by the Hyatt Place Pittsburgh. The loan has a term of years, carries a fixed interest rate of 7.29%, and is interest-only for its duration. |
| 4. | On June 6, 2024, two subsidiaries of Chatham entered into two agreements with Barclays Capital Real Estate and Wells Fargo Bank to obtain a $22.0 million loan secured by the SpringHill Suites Savannah and a $15.0 million loan secured by the Hampton Inn & Suites Exeter. Each loan has a term of years, carries a fixed interest rate of 6.70%, and is interest-only for its duration. |
On September 25, 2025, the Company entered into a new credit agreement for a credit facility (the "Credit Facility") consisting of a $300.0 million unsecured revolving credit facility and a $200.0 million unsecured term loan facility which replaced the existing $260.0 million revolving credit facility and the existing $140.0 million unsecured term loan facility. Proceeds from the new $200.0 million funded term loan were used to repay the $60.0 million of outstanding borrowings under the prior $260.0 million revolving credit facility and the $140.0 million of outstanding borrowings under the prior term loan. The new Credit Facility has an initial maturity date of September 25, 2029 and provides options to extend for year. Total commitments of $500.0 million under the new Credit Facility can be increased up to $650.0 million through an accordion feature.
At December 31, 2025 and 2024, the Company had $200.0 million and $250.0 million, respectively, of outstanding borrowings under its revolving credit facility and unsecured term loan. At December 31, 2025, the maximum remaining borrowing availability under the combined facilities was $300.0 million.
During the year ended December 31, 2025, the Company repaid the maturing mortgage loan of $16.0 million on the Hampton Inn Houston hotel property. During the year ended December 31, 2024, the Company repaid the maturing mortgage loans of $29.3 million on the Residence Inn Garden Grove hotel property, $34.9 million on the Residence Inn Mountain View hotel property, $27.6 million on the SpringHill Suites Savannah hotel property, $59.5 million on the Residence Inn Silicon Valley I hotel property, $65.0 million on the Residence Inn Silicon Valley II hotel property, $44.7 million on the Residence Inn San Mateo hotel property, $18.8 million on the Hilton Garden Inn Marina del Rey hotel property, and $14.2 million on the Homewood Suites Billerica hotel property. The Company utilized cash, borrowings under its unsecured credit facility and unsecured term loan, and proceeds from its eight new mortgage loans to repay these loans.
The Company estimates the fair value of its fixed rate debt by discounting the future cash flows of each instrument at estimated market rates. All of the Company's mortgage loans are fixed-rate. Rates take into consideration general market conditions, quality and estimated value of collateral and maturity of debt with similar credit terms and are classified within level 3 of the fair value hierarchy. The estimated fair value of the Company’s fixed rate debt as of December 31, 2025 and 2024 was $154.0 million and $164.8 million, respectively.
The Company estimates the fair value of its variable rate debt by taking into account general market conditions and the estimated credit terms it could obtain for debt with a similar maturity and that is classified within level 3 of the fair value hierarchy. As of December 31, 2025, the Company’s variable rate debt consisted of borrowings under its revolving credit facility and its unsecured term loan. The estimated fair value of the Company’s variable rate debt as of December 31, 2025 and 2024 was $200.0 million and $250.0 million, respectively.
Future scheduled principal payments of debt obligations as of December 31, 2025, for each of the next five calendar years and thereafter are as follows (in thousands):
| Amount | ||||
| 2026 | $ | — | ||
| 2027 | — | |||
| 2028 | 24,590 | |||
| 2029 | 223,681 | |||
| 2030 | 410 | |||
| Thereafter | 94,544 | |||
| Total debt before unamortized debt issue costs | $ | 343,225 | ||
| Unamortized mortgage debt issue costs | (4,312 | ) | ||
| Total debt outstanding | $ | 338,913 | ||
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.