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.
There is a rating agency that gives an investment grade rating for the company called as the investment grade credit tenant. 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. The investment grade tenants does not focus on the credit of the landlord or the real estate.
The rating of the tenant will as a matter of fact be the basis of the lenders of investment grade tenants. The main reason as to why this is being done is so that it will be possible to sell the 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. As a matter of fact, the states and cities rank as well as participants in the investment grade credit tenants.
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. To be able to refinance the property or even buy a property are some of the options that they have for the loans. The loans can also be structured in a way that is non recourse to the owner of the property. What will happen if one will push through with this option is that the personal liability of the landlord will 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.
The investment grade credit tenants also has the option to be able to obtain direct financing. The best way in order to be able to avail of this is to be able to enter 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. On favorable terms the property owner will be able to earn cash. This also means that they now have the opportunity to have a higher loan to value. What you need to know about this is that you will not be able to find this in the traditional commercial real estate loan.
For the property owners that are in need of the loans at the soonest possible time can in fact avail of the investment grade credit tenants. The investment grade credit tenants will be able to bring them a great deal of benefits.