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A credit tenant loan (CTL) is a real estate loan that is secured by the obligation of a single investment grade company to pay debt service by means of rental payments under a high quality lease or through a recourse loan obligation.

Requirements for a credit tenant loan include investment grade tenant, fully amortizing preferred, or up to 35% of the loan balloon, and bond, absolute net, or double net lease. Typical attributes of a credit tenant loan include debt service coverage as low as 1.0x-1.05x rent (depending on lease quality), and high loan-to-value ratios based on MAI appraised value. CTL also includes potentially all property types and uses, depending on the strength of credit tenant. Physical condition assessments are required for double net leases only and seismic reports are required in areas with seismic risk. While transaction ratings and specialty insurance to cover casualty and condemnation risk is not required, phase I environmental and MAI appraisals are required. CTL prefer locations in primary and secondary markets, but may permit tertiary markets depending on credit quality. Investment grade tenants can be public or private companies, national or regional in operation, and must have the ability to get audited financial statements.

A credit tenant loan is $2 million and up and can rate lock at application. CTLs are fully amortizing or covered balloon exposure at maturity. Special purpose entity or single asset entity is preferred, but not mandatory, as well as trustee structure, depending on each transaction. Construction permanent loan capabilities have different guidelines, with up to 18 months for construction period and a minimum loan of $7 million. A long-term credit tenant loan program enables a borrower to receive the highest loan proceeds that a property’s rent payments can handle. The fixed rent payments defined in the lease generally amortize the greater part of the balance of the loan during the term of the lease, which is usually 20 years. A single-tenant lease property’s qualifications are similar to CTL’s program, but the tenant should be rated BBB- (Standard & Poor’s) or Baa3 (Moody’s) or better. Credit tenants with BBB- or Baa3 ratings may also qualify for financing. Special provisions may be available to facilitate sales.

At Ocean Pacific Capital, for over 31 years, we have understood the commercial financing industry inside and out. Please give us a call today at 1-800-595-1474 or fill out our online commercial application.

Whatever your financing needs,
we will tailor a loan that's right for you.


Daily Oil & Gas and Wall Street Journal News

Oil Posts Weekly Gain as Global Tension Outweighs Shale Fear
Posted on Thursday March 15, 2018

Crude posted a second weekly gain as a whirlwind of rising geopolitical concerns stole the shale boom's limelight.

Colonial Pipeline to Pay Alabama $3.3 Mln for 2016 Spills -State Official
Posted on Thursday March 15, 2018

The settlement includes a $1.3 million civil penalty and $1.8 million in projects for the state.

Eni Promises Richer Returns After Exploration Success
Posted on Thursday March 15, 2018

The biggest foreign oil and gas producer in Africa will add 2 billion barrels of new oil and gas production over the next four years.

Exxon Mobil Partnering With Pakistan for Third LNG Terminal
Posted on Thursday March 15, 2018

Pakistan has the largest appetite for LNG among emerging markets, according to Bloomberg New Energy Finance.

US Appeals Court Approves ETP's Bayou Bridge Pipeline Construction
Posted on Thursday March 15, 2018

The disputed 162-mile (261-km) pipeline is an extension to an existing line, which transports crude from Nederland, Texas, to Lake Charles, Louisiana.

Oil, Gas Leaders Warn Trump He Risks Harming Their Industry
Posted on Thursday March 15, 2018

The meeting came a week after Trump decided to slap a 25 percent levy on steel imports

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Posted on Thursday March 15, 2018

On the worst stock-market day for U.S. pipeline operators in two years, Wall Street analysts and pipeline insiders saw reason to smile.

Aramco Said to Get Cool Response on IPO From US Investors
Posted on Thursday March 15, 2018

Even with a market value of $1 trillion Saudi Aramco would comfortably be the planet's most valuable company.

Russian LNG Exporter Warns Against 'Vilifying' Country's Gas
Posted on Thursday March 15, 2018

"We've been vilified for delivering gas to the market," said Novatek's CFO.

PTT Picks Technology Chief As Next CEO
Posted on Thursday March 15, 2018

PTT Pcl, Thailand's largest oil and gas company, has chosen Chansin Treenuchgron as the next chief executive in place of Tevin Vongvanich, who will retire later this year.

Wall Street Journal
Commercial News


WSJ.com: Commercial Real Estate

Sign of the Times: New Office Space Created in Retail's Tumult
Normandy Real Estate Partners? $133 million deal for the upper portion of ABC Carpet?s flagship store is an example of office space edging into territory that once was retail?s domain.

Want to Buy a Luxury Hotel in the U.S.? Try China's Insurance Regulator
When Chinese regulators seized control of Anbang Insurance, they took ownership of more than a dozen luxury U.S. hotels. Now, as the government looks to sell, it faces a problem: The buildings likely are worth less than what Anbang paid only a couple of years ago.

New York's Commercial Property Slump Shows Signs of Slowing
After a two-year plunge, brokers are optimistic that more deals will take place in 2018.

NYC Council Stops Midtown Tower Construction
Work on an 800-foot-tall tower in East Midtown that has been under construction for six months was halted last week following a vote by the New York City Council to limit skyscrapers in the area,.

Malls Never Wanted Gyms. Now They Court Them
Mall owners long treated gyms, massage parlors, and billiards halls as unwanted tenants that attracted lower-rent visitors who were unlikely to shop. Now they?re giving health clubs some of their best real estate.

New Jersey Office Rents Near Records
Asking rents for New Jersey office space are nearing records as landlords undertake extensive renovations and fill older properties with top-notch amenities.

Brookfield Property Makes $14.8 Billion Offer to Acquire Rest of GGP
Brookfield Property Partners LP has made a $14.8 billion offer to acquire the shares of mall owner GGP Inc. that it doesn?t already own, according to people familiar with the matter.

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Charles Elfsten, President
Charles A. Elfsten
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