What is going to happen to those Land Bonds if the rezoning process fails?
Due to the risky nature of Land Bonds, issuers usually have to provide substantial guarantees and/or insurance protections in order to entice investors. It is important to look at the credit quality as rated by major credit rating agencies, and redemption features incorporated with the bonds. “What will happen if the company/issuer fails to facilitate the sale of the land assets on or before the maturity date or if the selling price is below the cost of the land assets or the par value of the bond due to drastic market downturn?” The management company/issuers have to perform regular appraisals of the underlying land assets so as to keep investors informed on possible changes in the market. It is a common condition lied in the Land Bonds that issuers will have the option to buy those underlying assets back at an opened market value possibly with a discount predetermined at the time when the bonds are first issued. In the case of a profitable nature, the outcome would be straightforward
Related Questions
- How long does an Exception, Variance, and Conventional Rezoning process take? What about Administrative Deviations and Waivers?
- How long has the process of designing the configuration been going on? Wasn’t the current configuration an after thought?
- What is going to happen to those Land Bonds if the rezoning process fails?
