Annual report pursuant to Section 13 and 15(d)

Debt of the Operating Partnership

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Debt of the Operating Partnership
12 Months Ended
Dec. 31, 2018
Tanger Properties Limited Partnership [Member]  
Debt of the Operating Partnership
Debt of the Operating Partnership

The debt of the Operating Partnership as of December 31, 2018 and 2017 consisted of the following (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2018
 
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

 
246,664

 
250,000

 
246,036

Senior notes
 
3.750
%
 
December 2024
 
250,000

 
247,765

 
250,000

 
247,410

Senior notes
 
3.125
%
 
September 2026
 
350,000

 
345,669

 
350,000

 
345,128

Senior notes
 
3.875
%
 
July 2027
 
300,000

 
296,565

 
300,000

 
296,182

 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgages payable:
 
 
 
 
 
 
 
 
 
 
 
 
Atlantic City (2) (3)
 
5.14%-7.65%

 
November 2021- December 2026
 
34,279

 
36,298

 
37,462

 
39,879

     Southaven
 
LIBOR + 1.80%

 
April 2021
 
51,400

 
51,173

 
60,000

 
59,881

Unsecured term loan
 
LIBOR + 0.90%

 
April 2024
 
350,000

 
346,799

 
325,000

 
322,975

Unsecured lines of credit
 
LIBOR + 0.875%

 
October 2021
 
145,100

 
141,985

 
208,100

 
206,160

 
 
 
 
 
 
$
1,730,779

 
$
1,712,918

 
$
1,780,562

 
$
1,763,651

(1)
Includes premiums and net of debt discount and unamortized debt origination costs. Unamortized debt origination costs were $14.1 million and $12.7 million as of December 31, 2018 and 2017, respectively. Amortization of deferred debt origination costs included in interest expense for the years ended December 31, 2018, 2017 and 2016 was $3.1 million, $3.3 million and $3.2 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 $182.0 million at December 31, 2018, serve as collateral for mortgages payable. We maintain unsecured lines of credit that, as of December 31, 2018, 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, 2018, 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, 2018, 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.

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.

Debt Maturities

Maturities of the existing long-term debt as of December 31, 2018 for the next five years and thereafter are as follows (in thousands):
Calendar Year
 
Amount

2019
 
$
3,370

2020
 
3,566

2021
 
202,293

2022
 
4,436

2023
 
254,768

Thereafter
 
1,262,346

Subtotal
 
1,730,779

Net discount and debt origination costs
 
(17,861
)
Total
 
$
1,712,918