5 Uses For Investments
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.
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. 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 rating of the tenant will as a matter of fact be the basis of the lenders of investment grade tenants. This is to make sure that the loans will be sold to 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-. There are a lot of investors that would invest in similar products and bonds as well. As a matter of fact, the states and cities rank as well as participants in the investment grade credit tenants.
Most of the time, the landlords that have investment grade credit tenants are able to avail of long term loans. They can make use of the loans to refinance the property or purchase a property. To be a non recourse to the owner of the property is one way to be able to structure the loans. 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. The lender that has an investment grade credit tenants now has the power to be able to sell and lease to an investor. In terms of favorable terms, the property owner will now be able to earn cash. A higher loan to value is as a matter of fact what they can also have. What you need to know about this is that you will not be able to find this 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.