A Better Knowledge on Investment Grade Credit Tenants
A special financing offer for the landlords is what is called as the investment grade credit tenants and this is what you need to know first.
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. 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. This is the kind of special financing that focuses 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. This is to make sure that the loans will be sold to institutional investors and securitize the loans. What you need to know about the investment grade is that the rating has to be at least BBB-. 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. To be able to refinance the property or even buy a property are some of the options that they have for the loans. 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. This will mean that the threat of personal liability will be removed. The underwriters will be able to rely on the lease value which is why this can be possible.
There is another thing that the investment grade credit tenants can do and that is to be able to have the direct financing obtained. To enter into the sale leaseback transaction is as a matter of fact how this can be done. To be able to sell and lease to an investor is what the lender with an investment grade credit tenants can do. What happens now is that the property owner will be able to earn cash on favorable terms. 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.
The investment grade credit tenants can actually be availed of by the property owners that are in need of loans at the soonest possible time. The investment grade credit tenants will be able to bring them a great deal of benefits.
Attributed by: Incredible Lessons I’ve Learned About Investments