Debt-service coverage ratio

(redirected from Debt Service Ratios)

Debt-service coverage ratio

Earnings before interest and income taxes, divided by interest expense plus the quantity of principal repayments divided by one minus the tax rate.

Debt-Service Coverage Ratio

1. In investment real estate, the ratio of annual net operating income on a piece of investment property to its annual debt service. Banks use the DSCR to help determine whether to make or refinance loans for investment property. A DSCR equal to or greater than 1 indicates that the debtor is able to service the debt on the income from the investment property. In personal finance, banks usually require a DSCR of at least 1 to make such a loan, while they generally expect a ratio of 1.2 for commercial projects.

2. In government finance, the ratio of annual export earnings to its annual debt service on external debt.
References in periodicals archive ?
The Stable Outlook reflects Fitch's expectation of a strong operating performance resulting in healthy debt service ratios.
Finding that debt and debt service ratios of the government are at "comfortable" levels, the IMF said a major part of the amortisation of the government's external debt falls was due after 2017.
Some banks have resumed residential mortgage lending, which will facilitate these end-buyers to purchase villas and apartments, but loan to values and debt service ratios will no doubt remain conservative for the time being.
The mortgage company offers flexible mortgages with a wide range of benefits, including loan-to-value ratios of up to 85 per cent, loan terms of between 3 and 30 years, flexible repayment methods and debt service ratios of up to 55 per cent.
Abu Dhabi Finance launched in 2008 with a capital of Dh500 million, offers mortgages with a wide range of benefits, including loan-to-value ratios of up to 85 per cent, loan terms of between three and 30 years, flexible repayment methods and debt service ratios of up to 55 per cent.
Abu Dhabi Finance formed and launched in 2008 with a capital of Dh 500 million, offers mortgages with a wide range of benefits, including loan-to-value ratios of up to 85 per cent, loan terms of between three and thirty years, flexible repayment methods and debt service ratios of up to 55 per cent.
It offers mortgages with a wide range of benefits, including loan-to-value ratios of up to 85 per cent, flexible repayment methods and debt service ratios of up to 55 per cent.
With interest rates still near historic lows, actual floating-rate debt service ratios (DSCRs) remain generally strong--even in cases where a loan's collateral performance may have fallen, reflecting operating issues, S & P said.
Many observers prefer to look at debt service ratios because they include information from all households, not just those filing for bankruptcy or falling behind in their payments.
As money becomes more expensive, it becomes more difficult to close deals with the same underwriting as previously used as loan to value and debt service ratios are reduced.
He added that debt service ratios were still quite low because of the low level of interest rates at the moment 'The danger is that if rates were to rise sharply, debt service would also go up.
Pakistan's external debt and debt service ratios also exceeded the prescribed debt sustainability normal limits of 225-250 percent and 20-25 percent [State Bank (1998), p.