Corporate Note / Debenture

A note is an IOU. It is a loan for a fixed period of time for a fixed rate of return. In our world, notes are issued by sponsors of Tenant-in-Common (TIC) properties. These are generally used as short-term debt in the financing and sale of TIC properties. A note may either be backed by assets of the borrower or may simply be backed by their good faith and credit. The credit quality of a note is generally only as good as the company itself. Most notes carry higher risk but also offer a higher rate of return. Notes can offer an excellent way to increase income for an investor with a diversified portfolio. Notes generally have a short holding period, from 1 to 3 years.