The Basic Guide to 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.
The investment grade credit tenant is a kind of company that is able to have an investment grade rating from the rating agency. If there is a property that is rented by the credit tenant then what will happen is that the lenders will offer a special financing. It is actually on the value and the tenant in its lease payments in the future wherein the focus of the special financing is placed. The investment grade tenants does not focus on the credit of the landlord or the real estate.
What you need to know about the lenders of the investment grade tenants is that it 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. There are a lot of investors that would invest in similar products and bonds as well. The participants that are able to rank in the investment grade credit tenants are the states and cities as well.
The long term loans can as a matter of fact be availed of by the landlords when they have investment grade credit tenants. They can make use of the loans to refinance the property or purchase a property. When it comes to the loans they can actually be structured in a way that it will now be 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 reason why this can happen is because of the fact that the underwriters will be relying on the lease value.
The investment grade credit tenants also has the option to be able to obtain direct financing. The best way to be able to do this is through the entering of the sale leaseback transaction. The lender that has an investment grade credit tenants now has the power to be able to sell and lease to an investor. In terms of favorable terms, the property owner will now be able to earn cash. A higher loan to value is as a matter of fact what they can also have. When it comes to the traditional real estate loan, you will actually not be able to find this in here.
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 bring them a great deal of benefits.
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