Private Placements are fixed income securities that are not registered with the Securities and Exchange Commission (SEC). As such, private placement bonds are not publicly issued or publicly traded, and as a result are not required to be rated by a credit rating agency.
Private Placement Bonds issued without pledged collateral are called Senior Unsecured Private Placements, and those issued with pledged collateral are Senior Secured Private Placements. The issuer of the bonds is directly and fully responsible for repayment of the notes based on its full faith and credit, so the notes are referred to as Direct Obligation Private Placement Bonds.
Focus is given to bond issuers with investment grade credit ratings from a Nationally Recognized Statistical Rating Organization (NRSRO). Alternatively, issuers without credit ratings from an NRSRO may still be acceptable if they have an NAIC rating of 1 (AAA through A-) or 2 (BBB+ through BBB-).Loan Structure:
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 Types and Lease Structures:
Combined Construction and Permanent Bond:
“Date Certain” Rent Commencement Date:
Letter of Credit-Backed Credit Enhancement:
Forward Commitment to Fund:
Government Facilities Finance may be structured as leased real estate transactions, or the governmental body may elect to issue taxable or tax-exempt bonds to finance a project or for the general good of the public.
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