A Better 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. 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.
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. There are a lot of investors that would 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. When they have the loans, they have the option to be able to refinance the property or even buy a property. 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 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. 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. On favorable terms the property owner will be able to earn cash. This also means that they now have the opportunity 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.
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 avail of the benefits.