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.
The investment grade credit tenant is a kind of company that is able to have 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. 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. Actually, the focus of these investment grade tenants is not on the credit of the landlord and not on the real estate as well.
What you need to know about the lenders of the investment grade tenants is that it will based on the rating of the tenant. 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. 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. When they have the loans, they have the option to be able to refinance the property or even buy 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 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. What the lenders with the investment grade credit tenants do is that they can sell and lease to an investor. On favorable terms the property owner will be able to earn cash. They will also be able 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.
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. There is a great deal of benefits that people can enjoy with the investment grade credit tenants.