A Better 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.
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. 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. 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. The most important thing that you need to know about the investment grade is that the rating has to be at least BBB-. 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. 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. 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 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. 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.
Therefore, the property owners that are in need of loans as soon as possible can avail of the investment grade credit tenants. The investment grade credit tenants will be able to bring them a great deal of benefits.