4 Steps CTL Lenders Can Take To Minimize Bankruptcy Risks
November 4, 2013, 12:12 PM EST
Law360, New York (November 4, 2013, 12:12 PM EST) -- Credit tenant lease (CTL) financing can be an attractive alternative to traditional real estate loans from both the lender’s and borrower’s perspectives. Owners and developers with investment grade tenants (so-called “credit tenants”) can take advantage of CTL financing to obtain long-term, fixed-rate loans up to the full value of the real estate.
With a credit tenant and a properly structured lease supported by appropriate insurance, a CTL lender can minimize collateral-level risk and market the loan as a private placement bond. Institutional bond investors, in turn,...