Tuesday, February 7, 2017

How to Forecast Tenants’ Credit Risk for the Decade Ahead

Investment risk does not center on how likely a tenant is to default within 12 to 18 months, which is the general timeframe of a corporate credit rating.  The concern is how likely the lease contract is to perform over its entire life, which may be 10 years or longer.  STORE Capital CEO Chris Volk discusses how such an evaluation must look at the cumulative multi-year default risk, as well as the credit migration risk, in Risky Business.