Company: DRH-PA
Filing Date: 2025-05-02
Form Type: 10-Q
Source: 0001298946-25-000049
Chunk: 10

Company: DiamondRock Hospitality Co
Filing Date: 2025-05-02
Form: 10-Q
Item: Part I, Item 1
Chunk 10
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 55%1.95%1.85%Greater than or equal to 55%2.25%2.20% The Credit Agreement contains various financial covenants. A summary of the most significant covenants is as follows:Actual atCovenant March 31, 2025Maximum leverage ratio (1)60%26.0%Minimum fixed charge coverage ratio (2)1.50x3.12xSecured recourse indebtednessLess than 45% of Total Asset Value8.6%Maximum unencumbered leverage ratio60%28.4%Minimum unencumbered implied debt service coverage ratio1.20x2.67x_____________________________(1)Leverage ratio is net indebtedness, as defined in the Credit Agreement, divided by total asset value, defined in the Credit Agreement as the value of our owned hotels based on hotel net operating income divided by a defined capitalization rate. (2)Fixed charge coverage ratio is Adjusted EBITDA, generally defined in the Credit Agreement as EBITDA less FF&E reserves, for the most recent trailing 12 month period, to fixed charges, which is defined in the Credit Agreement as interest expense, all regularly scheduled principal payments and payments on capitalized lease obligations, for the same 12 month period. 

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The components of the Company's interest expense consist of the following (in thousands):Three Months Ended March 31, 20252024Unsecured term loan interest$10,762 $11,387 Mortgage debt interest3,092 4,034 Credit facility interest and unused fees308 312 Amortization of debt issuance costs535 513 Finance lease expense(1)461 — $15,158 $16,246 _____________(1)In October 2024, we extended the term on one of our ground leases, and, as a result, the lease classification changed from an operating lease to a finance lease.

6. Derivatives

We have the following derivatives (dollars in thousands):Fair Value of Assets (Liabilities)Hedged DebtTypeFixed RateIndexEffective DateMaturity DateNotional AmountMarch 31,2025December 31, 2024$500M Senior unsecured term loansSwap3.36 %SOFRMarch 1, 2023January 1, 2028$75,000 487 1,328 $500M Senior unsecured term loansSwap3.50