Tanger Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Debt of the Operating Partnership

Debt of the Operating Partnership

9 Months Ended

Sep. 30, 2018

Tanger Properties Limited Partnership [Member]

The debt of the Operating Partnership consisted of the following (in thousands):



				As of				As of
				September 30, 2018				December 31, 2017
	Stated Interest Rate(s)		Maturity Date	Principal		Book Value⁽¹⁾		Principal		Book Value⁽¹⁾
Senior, unsecured notes:
Senior notes	3.875	%	December 2023	$	250,000	$	246,505	$	250,000	$	246,036
Senior notes	3.750	%	December 2024	250,000		247,677		250,000		247,410
Senior notes	3.125	%	September 2026	350,000		345,533		350,000		345,128
Senior notes	3.875	%	July 2027	300,000		296,469		300,000		296,182

Mortgages payable:
Atlantic City ⁽²⁾⁽³⁾	5.14%-7.65%		November 2021- December 2026	35,091		37,211		37,462		39,879
Southaven	LIBOR + 1.80%		April 2021	51,400		51,148		60,000		59,881
Unsecured term loan	LIBOR + 0.95%		April 2021	325,000		323,416		325,000		322,975
Unsecured lines of credit	LIBOR + 0.875%		October 2021	203,100		199,701		208,100		206,160
				$	1,764,591	$	1,747,660	$	1,780,562	$	1,763,651


(1)	Including premiums and net of debt discount and debt origination costs.


(2)	The effective interest rate assigned during the purchase price allocation to the Atlantic City mortgages assumed 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 $183.3 million at September 30, 2018, serve as collateral for mortgages payable. We maintain unsecured lines of credit that provide for borrowings of up to $600.0 million. The unsecured lines of credit include a $20.0 million liquidity line and a $580.0 million syndicated line. The syndicated line may be increased up to $1.2 billion through an accordion feature in certain circumstances. As of September 30, 2018, letters of credit totaling approximately $6.0 million were issued under the lines of credit.

We provide guarantees to lenders for our joint ventures which include standard non-recourse carve out indemnifications for losses arising from items such as but not limited to fraud, physical waste, payment of taxes, environmental indemnities, misapplication of insurance proceeds or security deposits and failure to maintain required insurance. For construction and term loans, we may include a guaranty of completion as well as a principal guaranty ranging from 5% to 100% of principal. The principal guarantees include terms for release or reduction based upon satisfactory completion of construction and performance targets including occupancy thresholds and minimum debt service coverage tests. As of September 30, 2018, the maximum amount of unconsolidated joint venture debt guaranteed by the Company was $28.2 million.

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 September 30, 2018, we believe we were in compliance with all of our debt covenants.

Increased Borrowing Capacity and Extension of Unsecured Lines of Credit

In January 2018, we closed on amendments to our unsecured lines of credit, which increased the borrowing capacity from $520.0 million to $600.0 million and extended the maturity date from October 2019 to October 2021, with a one-year extension option. We also reduced the interest rate spread over LIBOR from 0.90% to 0.875%, and increased the incremental borrowing availability through an accordion feature on the syndicated line from $1.0 billion to $1.2 billion. Loan origination costs associated with the amendments totaled approximately $2.3 million.

Southaven Mortgage

In February 2018, the consolidated joint venture that owns the Tanger outlet center in Southaven, Mississippi amended and restated the $60.0 million mortgage loan secured by the property that was scheduled to mature in April 2018. The amended and restated loan reduced the principal balance to $51.4 million, increased the interest rate from LIBOR + 1.75% to LIBOR + 1.80% and extended the maturity to April 2021, with a two-year extension option. In March 2018, the consolidated joint venture entered into an interest rate swap, effective March 1, 2018, that fixed the base LIBOR rate at 2.47% on a notional amount of $40.0 million through January 31, 2021.

$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.

Debt Maturities

Maturities of the existing long-term debt as of September 30, 2018 for the next five years and thereafter are as follows (in thousands):



Calendar Year	Amount
2018	$	813
2019	3,369
2020	3,566
2021	585,293
2022	4,436
Thereafter	1,167,114
Subtotal	1,764,591
Net discount and debt origination costs	(16,931		)
Total	$	1,747,660