A Basic Knowledge on Investment Grade Credit Tenants
The very first thing that you should know about the investment grade credit tenants is that this is a special offer of finances for the landlords.
Another thing that you need to know about the investment grade credit tenant is that this is a company that receives an investment grade rating from the rating agency. A special financing will be provided by the lender when there is a credit tenant that will rent on a property. The focus of the special financing is as a matter of fact on the value and the tenant in its lease payments in the future. Actually, the focus of these investment grade tenants is not on the credit of the landlord and not on the real estate as well.
The lenders of the investment grade tenants will based on the rating of the tenant. This is to make sure that the loans will be sold to institutional investors and securitize the loans. A rating of at the very least a BBB- is what you need to know about the investment grade. Investing in similar products and bonds is as a matter of fact what a lot of investors would gladly do. The participants that are able to rank in the investment grade credit tenants are the states and cities as well.
On the part of the landlords, if they have investment grade credit tenants it would mean that they can avail of the long term loans. They can make use of the loans to refinance the property or purchase a property. The loans can also be structured in a way that is non recourse to the owner of the property. At the end of the day, pushing through with this option will now mean that the personal liability of the landlord will now be removed. The main reason why it is possible is because of the fact that what the underwriters will do is that they will be relying on the lease value.
There is another thing that the investment grade credit tenants can do and that is to be able to have the direct financing obtained. The best way to be able to do this is through the entering of the sale leaseback transaction. What the lenders with the investment grade credit tenants do is that they can sell and lease to an investor. In terms of favorable terms, the property owner will now be able to earn cash. This also means that they now have the opportunity to have a higher loan to value. This is something that you cannot find in the traditional commercial real estate loan.
Therefore, the property owners that are in need of loans as soon as possible can avail of the investment grade credit tenants. The investment grade credit tenants will be able to avail of the benefits.
Suggested Article: you could try here