Sherwin Williams Building Loan:
Loan Products for a Sherwin Williams store. Below is a summary of one of several products available through Caffrey & Company, LLC for a Sherwin Williams building loan. Rates are as of September 16, 2020. We can work with 1031 Investors to acquire a Sherwin Williams store.
National Credit Lease Program Highlights for a Sherwin Williams building loan:
- Loans from $750,000 to $10,000,000 and up
- Multiple structures offered
Including 10 Year Fixed Rate
- Typical rates presently ranging from 3.79% to 3.99%
- Typical amortization: 25 years to 30 years
- Most require a minimum down payment between 20% and 25% of the purchase.
- Caffrey Loan Placement fee 1.0%
- Typical recourse: 20% to 25% Limited
- Flexible prepayment with extra 10% annual paydown allowed with no premium charged
- Minimum remaining primary lease term: 7 Years
- All loans assumable, with only ¼% fee
- Optional 50-day rate lock available
- Rate Lock—50 days from CCL acceptance and deposit submission
- Expedited closing process targets 33—35 days, CCL to potential closing table
Background on Sherwin-Williams Company:
For current earnings reports on Sherwin-Williams Company click on this link which will take you to the Sherwin-Williams Investor page:
Founded in 1866, The Sherwin-Williams Company is a global leader in the manufacture, development, distribution, and sale of paints, coatings and related products to professional, industrial, commercial, and retail customers.
Sherwin-Williams manufactures products under well-known brands such as Sherwin-Williams®, Valspar®, HGTV HOME® by Sherwin-Williams, Dutch Boy®, Krylon®, Minwax®, Thompson’s® Water Seal®, Cabot® and many more. With global headquarters in Cleveland, Ohio, Sherwin-Williams® branded products are sold exclusively through a chain of more than 4,900 company operated stores and facilities, while the company’s other brands are sold through leading mass merchandisers, home centers, independent paint dealers, hardware stores, automotive retailers, and industrial distributors. The Sherwin-Williams Performance Coatings Group supplies a broad range of highly-engineered solutions for the construction, industrial, packaging and transportation markets in more than 120 countries around the world. Sherwin-Williams shares are traded on the New York Stock Exchange (symbol: SHW).
CTL Investment Credit Ratings for Sherwin-Williams Company when considering a Sherwin Williams Building Loan:
Standard & Poors Global Ratings assigned a BBB- (investment grade) credit rating with a Stable Outlook on April 24, 2020. Moody’s shows a credit rate of Baa2, Outlook Stable, not on a watch list as of August 6, 2020. A Baa2 is considered investment grade with Moody’s as well. This is an upgrade from prior ratings:
Moody’s Background on updated rating:
Moody’s upgraded the ratings to reflect continued improvement in the company’s earnings, cash flow, and credit metrics despite an unprecedented shock from outbreaks of Coronavirus in the United States and around the world. Sherwin’s business has held up better than rated peers in the coatings industry and the vast majority of rated chemical companies. Revenues fell modestly and EBITDA improved in the first half of 2020 following the company’s aggressive pivot to focus on curbside pickup, delivery, and other methods to maintain business levels during rolling lockdowns, limitations on retail businesses, and adoption of social distancing policies across the United States. This demonstrated very clearly the strength and flexibility of its excellent brands, strong retail network, fleet of delivery vehicles, and customer-focused mentality. The company generated $1.8 billion of free cash flow over the past four quarters, maintained an excellent liquidity position, and successfully completed attractively-priced debt offerings.
Unsecured Credit Rating Update:
Sherwin’ Baa2 senior unsecured ratings balance the strength of the company’s business model and stated intention to reduce leverage against longer-term event risk in a still-fragmented global coatings industry. The company’s business model features an excellent position in the North American architectural paints business, strong retail network, and demonstrated ability to operate successfully through economic cycles. Acquiring Valspar Corporation (The) in June 2017 strengthened the company’s growth platform in more industrially-oriented end markets and international geographies — both of which remain modest contributors to earnings and cash flow today. Management reiterated an intention to reduce leverage to 2.0-2.5x (Debt/EBITDA; management’s definition) and reported leverage of 2.8x on a trailing twelve months basis ending 30 June 2020.
The rating incorporates that management will achieve this target in the coming quarters through a combination of earnings improvement and/or debt reduction. The rating also assumes that the company will continue to increase its regular dividend over time and resume share repurchases in the second half of 2020, which will slow deleveraging compared to a scenario where substantially all free cash flow is deployed toward debt reduction like 2018 and 2019. M&A opportunities in the coatings industry remain significant and event risk is a meaningful factor constraining the pace of improvement in the company’s ratings.
Other Factors impacing the ratings from Moody’s:
Environmental, social, and governance factors are important factors influencing Sherwin-Williams’ credit quality. The company is exposed to ESG issues typical for a company in the specialty chemical industry, including manufacturing products that are subject to specific regulatory scrutiny. Coatings companies typically have lower environmental risks related to manufacturing processes compared to other specialty chemical companies. Governance risks are similar to other publicly-traded chemical companies. The most significant ESG risk for Sherwin-Williams is social risk related the company’s exposure to health and safety issues related to the legacy use of lead in coatings products. Sherwin-Williams has been successful at defending against lead paint litigation for the past several decades with modest expected cash payments today.
Caffrey & Company LLC is your source for loans for investment grade credit tenants. Looking for more loan products for your investment property? Send a summary of your loan request and we’ll provide a free loan quote. Checkout other rates on our web site at: Commercial Real Estate Interest Rates.
On our web site you can read about specific loan products: www.caffreyloans.com/loan-products, offered by Freddie Mac, Fannie Mae, HUD/FHA, Commercial Mortgage Back Securities (CMBS) and other loan products. Want more details on sample interest rates for apartment check out Interest Rates for Apartment Loans also on our web site: www.caffreyloans.com/apartment-loans.