A Basic Knowledge on Investment Grade Credit Tenants
The first thing that you need to know about the investment grade credit tenants is that this is a special financing offer 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. 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. 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. To sell the institutional investors and securitize the loans is the reason why this is done. 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. As a matter of fact, the states and cities rank as well as participants in the investment grade credit tenants.
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. The loans can also be structured in a way that is non recourse to the owner of the property. This will mean that the threat of personal liability will be removed. The reason why this can happen is because of the fact that the underwriters 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. They will also be able to have a higher loan to value. 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 avail of the benefits.