Tanger Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Debt of the Operating Partnership

Debt of the Operating Partnership

12 Months Ended

Dec. 31, 2017

Tanger Properties Limited Partnership [Member]

The debt of the Operating Partnership as of December 31, 2017 and 2016 consisted of the following (in thousands):




				2017				2016
	Stated Interest Rate(s)		Maturity Date	Principal		Book Value⁽¹⁾		Principal		Book Value⁽¹⁾
Senior, unsecured notes:

Senior notes	6.125	%	June 2020	$	—	$	—	$	300,000	$	298,226
Senior notes	3.875	%	December 2023	250,000		246,036		250,000		245,425
Senior notes	3.750	%	December 2024	250,000		247,410		250,000		247,058
Senior notes	3.125	%	September 2026	350,000		345,128		350,000		344,600
Senior notes	3.875	%	July 2027	300,000		296,182		—		—

Mortgages payable:
Atlantic City ^{(2) (3)}	5.14%-7.65%		November 2021- December 2026	37,462		39,879		40,471		43,286
Foxwoods	LIBOR + 1.55%		December 2017	—		—		70,250		69,902
Southaven	LIBOR + 1.75%		April 2018	60,000		59,881		59,277		58,957
Unsecured term loan	LIBOR + 0.95%		April 2021	325,000		322,975		325,000		322,410
Unsecured lines of credit	LIBOR + 0.90%		October 2019	208,100		206,160		61,000		58,002
				$	1,780,562	$	1,763,651	$	1,705,998	$	1,687,866

(1)

Includes premiums and net of debt discount and unamortized debt origination costs. Unamortized debt origination costs were $12.7 million and $14.0 million for the years ended December 31, 2017 and 2016, respectively. Amortization of deferred debt origination costs included in interest expense for the years ended December 31, 2017, 2016 and 2015 was $3.3 million, $3.2 million and $2.7 million, respectively.


(2)	The effective interest rate assigned during the purchase price allocation to this assumed mortgage during the acquisition in 2011 was 5.05%.


(3)	Principal and interest due monthly with remaining principal due at maturity.

Certain of our properties, which had a net book value of approximately $193.1 million at December 31, 2017, serve as collateral for mortgages payable. We maintain unsecured lines of credit that, as of December 31, 2017, provided for borrowings of up to $520.0 million, including a separate $20.0 million liquidity line and a $500.0 million syndicated line. The syndicated line may be increased up to $1.0 billion through an accordion feature in certain circumstances. As of December 31, 2017, letters of credit totaling approximately $6.0 million were issued under the lines of credit.

The unsecured lines of credit and senior unsecured notes include covenants that require the maintenance of certain ratios, including debt service coverage and leverage, and limit the payment of dividends such that dividends and distributions will not exceed funds from operations, as defined in the agreements, for the prior fiscal year on an annual basis or 95% of funds from operations on a cumulative basis. As of December 31, 2017, we were in compliance with all of our debt covenants.

In January 2018, we amended the lines of credit to, among other things, increase the borrowing capacity, reduce the interest rate spread over LIBOR and extend the maturity date. See Note 24.

2017 Transactions

$300.0 Million Unsecured Senior Notes due 2027

In July 2017, we completed an underwritten public offering of $300.0 million of 3.875% senior notes due 2027 (the "2027 Notes"). The 2027 Notes priced at 99.579% of the principal amount to yield 3.926% to maturity. The 2027 Notes pay interest semi-annually at a rate of 3.875% per annum and mature on July 15, 2027. The net proceeds from the offering, after deducting the underwriting discount and offering expenses, were approximately $295.9 million. In August 2017, we used the net proceeds from the sale of the 2027 Notes, together with borrowings under our unsecured lines of credit, to redeem all of our 6.125% senior notes due 2020 (the "2020 Notes") (approximately $300.0 million in aggregate principal amount outstanding). The 2020 Notes were redeemed at par plus a “make-whole” premium of approximately $34.1 million. In addition, we wrote off approximately $1.5 million of unamortized debt discount and debt origination costs related to the 2020 Notes.

Foxwoods Debt Repayment

In November 2017, we repaid the $70.3 million floating rate mortgage loan secured by the Foxwoods property with borrowings under its unsecured floating rate lines of credit.

2016 Transactions

Deer Park Debt Repayment

In January 2016, we repaid our $150.0 million floating rate mortgage loan, which had an original maturity date in August 2018 and was related to our Deer Park outlet center.

Unsecured Term Note Repayment

In February 2016, we repaid our $7.5 million unsecured term note, which had an original maturity date in August 2017. In June 2016, our $10.0 million unsecured note payable became due and was repaid in June 2016.

Unsecured Term Loan

In April 2016, we amended our unsecured term loan to increase the size of the loan from $250.0 million to $325.0 million, extend the maturity date from February 2019 to April 2021, reduce the interest rate spread over LIBOR from 1.05% to 0.95%, and increase the incremental loan availability through an accordion feature from $150.0 million to $175.0 million.

Aggregate $350.0 Million Unsecured Senior Notes due 2026 and Westgate Debt Repayment

In August 2016, we completed a public offering of $250.0 million in senior notes due 2026 in an underwritten public offering. The notes were priced at 99.605% of the principal amount to yield 3.171% to maturity. In October 2016, we sold an additional $100.0 million of our senior notes due 2026. The notes priced at 98.962% of the principal amount to yield 3.248% to maturity. The notes pay interest semi-annually at a rate of 3.125% per annum and mature on September 1, 2026. The aggregate net proceeds from the offerings, after deducting the underwriting discount and offering expenses, were approximately $344.5 million. We used the net proceeds from the sale of the notes to repay a $62.0 million floating rate mortgage loan related to the outlet center in Glendale (Westgate), Arizona, repay borrowings under our unsecured lines of credit, and for general corporate purposes.

Savannah Debt Repayment

At the time of acquisition, the Savannah outlet center was subject to a $96.9 million mortgage loan, with an interest rate of LIBOR + 1.65% and maturity date in May 2017. In September 2016, we repaid the mortgage loan with borrowings under our unsecured lines of credit.

2015 Transactions

Southaven Mortgage

In April 2015, the consolidated joint venture closed on an interest only mortgage loan with the ability to borrow up to $60.0 million at an interest rate of LIBOR +1.75%. The loan initially matures on April 29, 2018, with one two-year extension option.

Hershey Mortgage

In May 2015, we repaid the mortgages associated with our Hershey outlet center, which were assumed as part of the acquisition of the property in 2011. The maturity date of the mortgages was August 1, 2015 and it had a principal balance at the date of extinguishment of $29.0 million.

Ocean City Mortgage

In July 2015, we repaid the mortgage associated with our Ocean City outlet center, which was assumed as part of the acquisition of the property in 2011. The maturity date of the mortgage was January 6, 2016 and had a principal balance at the date of extinguishment of $17.6 million.

Extension of Unsecured Lines of Credit

In October 2015, we closed on amendments to our unsecured lines of credit, extending the maturity and reducing our interest rate. The maturity date of these facilities was extended from October 2017 to October 2019 with the ability to further extend the maturity date for an additional year at our option. The interest rate was reduced from LIBOR + 1.00% to LIBOR + 0.90% based on our current credit rating and the maximum borrowings to which the syndicated line could be increased through an accordion feature in certain circumstances was increased from $750.0 million to $1.0 billion. Loan origination costs associated with the amendments totaled approximately $2.0 million.

Debt Maturities

Maturities of the existing long-term debt as of December 31, 2017 for the next five years and thereafter are as follows (in thousands):



Calendar Year	Amount
2018	$	63,184
2019	211,469
2020	3,566
2021	330,793
2022	4,436
Thereafter	1,167,114
Subtotal	1,780,562
Net discount and debt origination costs	(16,911		)
Total	$	1,763,651