NNN REIT (NYSE: NNN) is a net lease real estate investment trust that owns nearly 3,700 properties across the United States, leased to businesses such as convenience stores, auto service centers, and restaurants. These tenants sign long-term leases, averaging just over 10 years, with annual rent increases built in. This structure provides NNN with predictable cash flow and relatively low operating expenses.
The company holds investment-grade credit ratings of BBB+ from S&P and Baa1 from Moody’s, indicating a solid ability to manage its debt. These ratings are important indicators of financial health and influence borrowing costs and investor confidence.
**Why this matters**
Investment-grade credit ratings help keep borrowing costs manageable and attract institutional investors. If NNN’s rating were to fall below BBB-, it could face higher interest expenses and forced selling by some investors, which may pressure the stock price and increase the risk of dividend reductions. Maintaining a strong credit rating supports the sustainability of NNN’s dividend payments.