Retail tenants are still experiencing stress because of the pandemic and we believe the operating environment for Tanger's outlet properties has deteriorated such that a sufficient recovery within a two-year time horizon for both operating and credit metrics to support the BBB rating is unlikely. We are lowering our issuer credit and issue-level ratings on Tanger to 'BBB-' from 'BBB'. The stable outlook incorporates our view that further deterioration of operating and credit metrics could be tolerated at the current rating level despite weaker business prospects post-pandemic. In the next year, we anticipate ongoing pressure and greater cash flow volatility given the largely nondiscretionary nature of its tenants, which is further highlighted by its small size of its asset portfolio.
