Credit Tenant Lease Bond Finance

Credit Tenant Lease (CTL) transactions are structured as private placement bonds that focus primarily on the creditworthiness of the tenant and the strength of the lease structure and secondarily on the property type, location and quality of improvements.

Loan Underwriting:

  • Up to 100% LTV / no constraint on loan-to-cost
  • Minimum 1.00x to 1.05x DSCR
  • 0% vacancy allowance
  • Minimal expense deductions (annual trustee fee and any lessor expenses)
  • Investment grade or equivalent tenants
  • All property types financed
  • Non-real estate collateral can also be financed (i.e. equipment, tenant improvements, etc.)

Loan Types and Lease Structures:

  • Leased fee interests in real estate comprised of land and improvements
  • Leased fee interests in ground leases
  • Leasehold interests with either subordinated or unsubordinated ground leases
  • Lease can be Modified Gross, NN (double net), NNN (triple net) or Bondable
  • Leases with remaining terms of typically 10 to 30 years or longer

Loan Terms:

  • $5 million to $500 million
  • Fixed interest rate
  • Non-recourse
  • Loan term coterminous with the remaining lease term
  • Fully amortizing or balloon payments with or without RVI (residual value insurance)
  • 30/360 interest calculation
  • Yield maintenance at U.S. Treasuries plus 50 bps

cornell
Ithaca, NY

$50,878,000

Fixed rate construction-to-permanent CTL Private Placement Bond financing.