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

3 Months Ended

Mar. 31, 2020

Tanger Properties Limited Partnership [Member]

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



						As of				As of
						March 31, 2020				December 31, 2019
	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	$	247,471	$	250,000	$	247,308
Senior notes	3.750	%			December 2024	250,000		248,218		250,000		248,127
Senior notes	3.125	%			September 2026	350,000		346,354		350,000		346,215
Senior notes	3.875	%			July 2027	300,000		297,050		300,000		296,953

Mortgages payable:
Atlantic City ⁽²⁾⁽³⁾	5.14	%	-	7.65%	November 2021- December 2026	30,037		31,559		30,909		32,531
Southaven	LIBOR		+	1.80%	April 2021	51,400		51,297		51,400		51,272
Unsecured term loan	LIBOR		+	1.00%	April 2024	350,000		347,531		350,000		347,367
Unsecured lines of credit	LIBOR		+	1.00%	October 2021	599,830		598,074		—		—
						$	2,181,267	$	2,167,554	$	1,582,309	$	1,569,773


(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 $171.7 million at March 31, 2020, 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 March 31, 2020, letters of credit totaling approximately $170,000 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 March 31, 2020, the maximum amount of unconsolidated joint venture debt guaranteed by the Company was $19.2 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 March 31, 2020, we believe we were in compliance with all of our debt covenants.

Unsecured Lines of Credit

As of December 31, 2019, there were no outstanding balances under our unsecured lines of credit. In March 2020, in response to the COVID-19 pandemic, we drew down approximately $599.8 million under our unsecured lines of credit to increase liquidity and preserve financial flexibility to help ensure that the Company is able to meet its obligations for a sustained period of time until there is more clarity regarding the impact of the pandemic.

Interest rates

In February 2020, due to a change in our credit rating, our interest rate spread over LIBOR on our $600.0 million unsecured line of credit facility increased from 0.875% to 1.0% and our annual facility fee increased from 0.15% to 0.20%. In addition, our interest rate spread over LIBOR on our $350.0 million unsecured term loan increased from 0.90% to 1.0%.

Debt Maturities

Maturities of the existing long-term debt as of March 31, 2020 for the next five years and thereafter are as follows (in thousands):



Calendar Year	Amount
For the remainder of 2020	$	2,694
2021	657,023
2022	4,436
2023	254,768
2024	605,140
Thereafter	657,206
Subtotal	2,181,267
Net discount and debt origination costs	(13,713		)
Total	$	2,167,554

Given the financial implications of COVID-19 and potential defaults on our debt covenants associated with our line of credit and term loan, we have considered our short-term (one year or less from the date of filing these financial statements) liquidity needs and the adequacy of our estimated cash flows from operating activities and other financing sources to meet these needs. These other sources include but are not limited to: existing cash, ongoing relationships with certain financial institutions, our ability to sell debt or issue equity subject to market conditions and proceeds from the potential sale of non-core assets. We believe that we have access to the necessary financing to fund our short-term liquidity needs.