GREENSBORO, N.C. - Tanger Inc. (NYSE:SKT), known for its ownership and operation of outlet shopping centers, has announced a significant amendment and extension to its unsecured lines of credit through its operating partnership, Tanger Properties Limited Partnership. This financial restructuring includes an increase in borrowing capacity and an extension of the credit facility's maturity date.
The key modifications to the credit agreement include an increase in the borrowing limit from $520 million to $620 million, with an option for Tanger to further expand the total borrowing capacity to $1.2 billion, subject to lender approval. Additionally, the maturity of the credit line has been extended to April 2028, with the possibility of a further extension to April 2029.
The amended agreement also introduces a revised ratings-based pricing grid, which will result in a reduction of 15 basis points at Tanger's current level, and maintains all financial covenant thresholds. This restructuring is expected to enhance Tanger's financial flexibility, allowing for continued growth and development of its retail properties.
Stephen Yalof, President and CEO of Tanger, expressed gratitude for the strong support from the company's lending group and emphasized Tanger's solid financial position. Michael Bilerman, Executive Vice President, CFO, and CIO, highlighted that the amendment would bolster the company's liquidity, reduce interest expenses, and provide increased flexibility for growth initiatives while maintaining a robust credit profile.
The joint bookrunners and lead arrangers for the transaction include BofA Securities, Inc.; Wells Fargo Securities, LLC; Truist Securities, Inc.; TD Bank, N.A.; and U.S. Bank National Association. Regions Bank served as the documentation agent, with The Bank of Nova Scotia and First Citizens Bank & Trust also participating in the facility.
Tanger, with over 43 years in the retail and outlet shopping industries, operates 38 outlet centers, one adjacent managed center, and one open-air lifestyle center, totaling over 15 million square feet across the United States and Canada.
This financial move is based on a press release statement and is intended to support Tanger's long-term strategies and stakeholder value. It comes after the company added three new centers in 2023, marking a period of expansion and strategic development for the retail real estate investment trust (REIT).
InvestingPro Insights
As Tanger Inc. (NYSE:SKT) fortifies its financial structure with enhanced credit facilities, it's important for investors to consider the company's current valuation and performance metrics. According to InvestingPro, Tanger has a market capitalization of $3.05 billion, reflecting its substantial presence in the retail property market.
The company's Price to Earnings (P/E) ratio stands at 28.5, with a slight increase to 30.06 when adjusted for the last twelve months as of Q4 2023. This metric suggests a premium valuation relative to near-term earnings growth, which may be of interest to investors looking for companies with stable earnings potential. Additionally, the Price to Book (P/B) ratio of 5.38 indicates that the market values the company at over five times its book value, potentially signaling a strong investor belief in Tanger's assets and future growth prospects.
InvestingPro Tips indicate that Tanger has been successful in maintaining its dividend payments for an impressive 32 consecutive years, with a dividend yield of 3.71% as of early 2024. The commitment to returning value to shareholders is further underscored by the fact that the company has raised its dividend for three consecutive years, with a notable dividend growth of 18.18% over the last twelve months as of Q4 2023. This consistent dividend performance is a key factor for income-focused investors.
Investors interested in a deeper dive into Tanger's financials and future outlook can find additional tips on InvestingPro, where there are currently 6 more tips available. For those considering a subscription, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. Tanger's next earnings date is set for April 30, 2024, which will provide further insights into the company's performance and strategic direction.
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