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, 2019

Tanger Properties Limited Partnership [Member]

The debt of the Operating Partnership as of December 31, 2019 and 2018 consisted of the following (in thousands):




						2019				2018
	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		247,308		250,000		246,664
Senior notes	3.750	%			December 2024	250,000		248,127		250,000		247,765
Senior notes	3.125	%			September 2026	350,000		346,215		350,000		345,669
Senior notes	3.875	%			July 2027	300,000		296,953		300,000		296,565

Mortgages payable:
Atlantic City ^{(2) (3)}	5.14	%	-	7.65%	November 2021- December 2026	30,909		32,531		34,279		36,298
Southaven	LIBOR		+	1.80%	April 2021	51,400		51,272		51,400		51,173
Unsecured term loan	LIBOR		+	0.90%	April 2024	350,000		347,367		350,000		346,799
Unsecured lines of credit	LIBOR		+	0.875%	October 2021	—		—		145,100		141,985
						$	1,582,309	$	1,569,773	$	1,730,779	$	1,712,918

(1)

Includes premiums and net of debt discount and unamortized debt origination costs. Excludes $2.0 million of unamortized debt origination costs related to unsecured lines of credit as of December 31, 2019 recorded in prepaids and other assets in the Consolidated Balance Sheet. Unamortized debt origination costs were $11.2 million and $14.1 million as of December 31, 2019 and 2018, respectively. Amortization of deferred debt origination costs included in interest expense for the years ended December 31, 2019, 2018 and 2017 was $3.0 million, $3.1 million and $3.3 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 $174.2 million at December 31, 2019, serve as collateral for mortgages payable. We maintain unsecured lines of credit that, as of December 31, 2019, provided for borrowings of up to $600.0 million, including a separate $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 December 31, 2019, letters of credit totaling $170,000 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, 2019, we believe we were in compliance with all of our debt covenants.

2018 Transactions

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.

Unsecured Term Loan

In October 2018, we amended and restated our unsecured term loan, increasing the size of the loan from $325.0 million to $350.0 million, extending the maturity from April 2021 to April 2024, and reducing the interest rate spread over LIBOR from 0.95% to 0.90%. The $25.0 million of proceeds were used to pay down the balances outstanding under our unsecured lines of credit.

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.

Debt Maturities

Maturities of the existing long-term debt as of December 31, 2019 for the next five years and thereafter are as follows (in thousands):



Calendar Year	Amount
2020	$	3,566
2021	57,193
2022	4,436
2023	254,768
2024	605,140
Thereafter	657,206
Subtotal	1,582,309
Net discount and debt origination costs	(12,536		)
Total	$	1,569,773