8-K: Tanger Inc. Announces $400 Million At-the-Market Offering Program

Tanger Inc. launches a new at-the-market offering program to issue and sell up to $400 million of its common shares, replacing a previous $250 million program.

Summary

• Tanger Inc. has initiated a new at-the-market (ATM) offering program, allowing the company to issue and sell up to $400 million of its common shares.
• The ATM program replaces a prior ATM offering program which had a remaining capacity of $34.5 million and was terminated on February 24, 2025.
• The company has entered into a sales agreement with several sales agents, forward sellers, and forward purchasers, including BofA Securities, Wells Fargo Securities, BTIG, Nomura Securities International, Regions Securities LLC, Scotia Capital (USA) Inc., TD Securities (USA) LLC, Truist Securities, Inc., Bank of America, N.A., Wells Fargo Bank, National Association, Nomura Global Financial Products, Inc., The Bank of Nova Scotia, The Toronto-Dominion Bank and Truist Bank.
• The company may sell shares through the sales agents or directly to them as principals, or through forward stock purchase transactions.
• The sales agreement allows for negotiated transactions, block trades, or at-the-market offerings at prevailing market prices.
• Sales agents will receive compensation not exceeding 2.0% of the gross sales price of shares sold through them.
• The company intends to use the net proceeds for general corporate purposes, including property development or acquisition, center expansion and improvement, joint venture investments, debt repayment, and working capital.
• The company terminated its existing ATM Equity OfferingSM Sales Agreement, dated as of December 6, 2023, by and among the Company, the Operating Partnership and the parties thereto (the 2023 Sales Agreement).
• Pursuant to the 2023 Sales Agreement, the Company previously issued and sold 4,478,110 Common Shares having an aggregate gross sales price of $145,731,868 and, in addition, the Company entered into forward sales of 1,915,762 Common Shares having an aggregate gross sales price of $69,730,795, which have outside settlement dates of December 31, 2025 and March 31, 2026, and have not settled as of the date hereof (the Outstanding Forward Sales), by means of a prospectus supplement dated December 6, 2023.

Sentiment

Score: 6

Explanation: The sentiment is neutral. While the ATM offering provides financial flexibility, it also introduces potential dilution for existing shareholders. The company's intended use of proceeds is positive, but the overall impact is balanced.

Positives

• The ATM program provides Tanger Inc. with flexibility in raising capital as needed.
• The company has access to a diverse group of sales agents and forward purchasers.
• The intended use of proceeds includes investments in growth opportunities and debt reduction.

Negatives

• The ATM offering could dilute existing shareholders' equity.
• The company may not receive any proceeds if it elects to cash settle or net share settle any forward sale agreement.
• Market conditions and the trading price of common shares will influence actual sales.

Risks

• Actual sales of shares will depend on market conditions, trading price, and capital needs.
• The company has no obligation to sell any of the securities and may suspend offers at any time.
• The company may elect to cash settle or net share settle forward sale agreements, potentially owing cash or shares to the forward purchaser.
• Some or all of the sales agents, forward sellers, and forward purchasers may have conflicts of interest due to other business dealings with the company.

Future Outlook

The company intends to use the net proceeds from any sales of Securities for general corporate purposes, which may include, but are not limited to, the development or the acquisition of additional portfolio properties as suitable opportunities arise, the expansion and improvement of certain centers in the Operating Partnerships portfolio, investments in joint ventures, the repayment of certain secured or unsecured indebtedness outstanding at such time (including amounts outstanding from time to time under the Companys lines of credit, senior notes, term loan or future indebtedness) and to provide for working capital.

Industry Context

ATM offerings are a common method for REITs to raise capital, providing flexibility and efficiency in accessing the market. This announcement is in line with industry practices for funding growth and managing capital structure.

Comparison to Industry Standards

• Simon Property Group (SPG) and Public Storage (PSA) have utilized ATM programs to raise capital for acquisitions and development.
• The 2.0% sales agent compensation is within the typical range for ATM offerings in the REIT sector.
• The intended use of proceeds aligns with common REIT practices of investing in property development, acquisitions, and debt reduction.

Stakeholder Impact

• Shareholders may experience dilution of their equity.
• Employees may benefit from the company's ability to fund growth initiatives.
• Customers may see improvements in Tanger's properties and services.
• Creditors may benefit from the company's debt repayment plans.

Next Steps

• The company will offer and sell common shares through the ATM program as determined by market conditions and capital needs.
• The company will file required reports with the SEC regarding the use of proceeds from the share sales.

Key Dates