Study: My Understanding of Properties
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.
There is a rating agency that gives an investment grade rating for the company called as the investment grade credit tenant. 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. Actually, the focus of these investment grade tenants is not on the credit of the landlord and not on the real estate as well.
The lenders of the investment grade tenants will based on the rating of the tenant. To sell the institutional investors and securitize the loans is the reason why this is done. A rating of at the very least a BBB- is what you need to know about the investment grade. There is one thing that you need to know about the investors and that is the fact that they would gladly 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.
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. 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. On favorable terms the property owner will be able to earn cash. They will also be able to have a higher loan to value. This is something that you cannot find 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. There is a great deal of benefits that people can enjoy with the investment grade credit tenants.
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