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. When there is a credit tenant that will rent a property then the lenders will have a special financing provided. 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. 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. What 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. 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. 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.
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. The lender that has an investment grade credit tenants now has the power to be able to sell and lease to an investor. 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.