Quarterly report pursuant to Section 13 or 15(d)

Debt of the Operating Partnership

Debt of the Operating Partnership
9 Months Ended
Sep. 30, 2021
Tanger Properties Limited Partnership [Member]  
Debt of the Operating Partnership Debt of the Operating Partnership
The debt of the Operating Partnership consisted of the following (in thousands):
As of As of
September 30, 2021 December 31, 2020
Stated Interest Rate(s) Maturity Date Principal
Book Value(1)
Book Value(1)
Senior, unsecured notes:  
Senior notes 3.875  % December 2023 $ —  $ —  $ 250,000  $ 247,967 
Senior notes 3.750  % December 2024 —  —  250,000  248,493 
Senior notes 3.125  % September 2026 350,000  347,189  350,000  346,770 
Senior notes 3.875  % July 2027 300,000  297,642  300,000  297,346 
Senior notes 2.750  % September 2031 400,000  390,839  —  — 
Mortgages payable:
Atlantic City (2)(3)(4)
5.14  % - 7.65% November 2021- December 2026 24,531  25,463  27,343  28,569 
     Southaven (5)
LIBOR + 1.80% October 2021 51,400  51,344  51,400  51,371 
Unsecured term loan LIBOR + 1.25% April 2024 300,000  298,288  350,000  347,370 
Unsecured lines of credit LIBOR + 1.20% July 2025 —  —  —  — 
  $ 1,425,931  $ 1,410,765  $ 1,578,743  $ 1,567,886 
(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.
(4)In October 2021, we repaid a $2.1 million mortgage note secured by the Atlantic City property, which was scheduled to mature in December 2021. The effective interest rate for the remaining notes remains 5.05% as established upon acquisition. The stated rates for the remaining secured notes ranged from 5.14% to 7.65% with maturity dates between November 2021 and December 2026.
(5)In October 2021, the joint venture that owns the Southaven, MS outlet center exercised its option to extend the maturity of the Southaven, MS mortgage to April 2023 and paid down the principal balance by $11.3 million to $40.1 million. The interest rate remains LIBOR + 1.80%. The outlet center is consolidated for financial reporting purposes and we funded the entire $11.3 million.

Certain of our properties, which had a net book value of approximately $155.2 million at September 30, 2021, serve as collateral for mortgages payable. As of September 30, 2021, we maintained unsecured lines of credit that provided for borrowings of up to $520.0 million. The unsecured lines of credit as of September 30, 2021 included a $20.0 million liquidity line and a $500.0 million syndicated line. As of September 30, 2021 and following the July 2021 amendments discussed below, the syndicated line may be increased up to $1.2 billion through an accordion feature in certain circumstances.

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, 2021, the maximum amount of unconsolidated joint venture debt guaranteed by the Company was $21.9 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, 2021, we believe we were in compliance with all of our debt covenants.
Unsecured term loan

In March 2021 and June 2021, we paid down a total of $50.0 million of borrowings under our $350.0 million unsecured term loan with cash on hand, reducing the outstanding balance to $300.0 million as of September 30, 2021.

Unsecured Lines of Credit Extension

In July 2021, we amended our unsecured lines of credit and extended the maturity date from October 2021 to July 2025, which may be extended by an additional year by exercising two six-month extension options. The amendment eliminated the LIBOR floor, which was previously 0.25%, and entitles us to a one basis point annual reduction in the interest rate if we meet certain sustainability thresholds. Other pricing terms remained the same. The lines provide for borrowings of up to $520.0 million, including a $20.0 million liquidity line and a $500.0 million syndicated line. A 0.25% facility fee is due annually on the entire committed amount of each facility. In certain circumstances, total line capacity may be increased to $1.2 billion through an accordion feature in the syndicated line.

Redemption of the 2023 and 2024 Senior Notes and public offering of aggregate $400.0 Million Unsecured Senior Notes due 2031

In April 2021, we completed a partial redemption of $150.0 million aggregate principal amount of our $250.0 million 3.875% senior notes due December 2023, for $163.0 million in cash, which included a make-whole premium of $13.0 million and the write off of approximately $1.0 million of debt discount and debt origination costs. The make-whole premium and the write off of debt discount and debt origination costs was recorded as a loss on early extinguishment of debt within the consolidated statements of operations. Subsequent to this redemption, $100.0 million aggregate principal amount of the Notes remained outstanding, until the redemption in August 2021, described below.

In August 2021, we completed a public offering of $400.0 million in senior notes due 2031. The notes were priced at 98.552% of the principal amount to yield 2.917% to maturity. The notes pay interest semi-annually at a rate of 2.750% per annum and mature on September 1, 2031. The aggregate net proceeds from the offering, after deducting the underwriting discount and offering expenses, were approximately $390.7 million. We used the net proceeds from the sale of the notes to redeem all remaining 3.875% senior notes due 2023, $100.0 million in aggregate principal amount outstanding, and all 3.750% senior notes due 2024, $250.0 million in aggregate principal outstanding. The redemptions occurred in September 2021 and included a make-whole premium of $31.9 million and the write off of approximately $1.9 million of debt discount and debt origination costs. The remaining proceeds were used for general corporate purposes.

Debt Maturities

Maturities of the existing long-term debt as of September 30, 2021 for the next five years and thereafter are as follows (in thousands):
Calendar Year Amount
For the remainder of 2021 $ 54,381 
2022 4,436 
2023 4,768 
2024 305,140 
2025 1,501 
Thereafter 1,055,705 
Subtotal 1,425,931 
Net discount and debt origination costs (15,166)
Total $ 1,410,765 
Given the financial implications of the COVID-19 pandemic, 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.