Asset Coverage

Asset Coverage

The extent to which a company can maintain operations at its level of debt. One of the most common ways to measure asset coverage is the asset coverage ratio, which divides the value of tangible assets less current liabilities by the company's total debt outstanding. These liabilities may include preferred dividends and rent. See also: Cash flow coverage ratio, Debt service coverage ratio.
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He added that the asset coverage ratio requirement had been officially lowered in June, giving the company significant flexibility to increase leverage and grow its portfolio.
Given the recent reduction in our asset coverage requirement, we have accelerated the origination of lower risk loans.
The 'A+' rating of the covered bonds is based on Co-op's Long-Term Issuer Default Rating (IDR) of 'B', an IDR uplift of two notches, a Payment Continuity Uplift (PCU) of six notches and the asset percentage (AP) Fitch relies upon at 77.5% (AP used in the asset coverage test published in the investor report), which provides more protection than the 'A+' breakeven AP of 92.5%.
M2 EQUITYBITES-February 4, 2019-Bain Capital declares approval of lower asset coverage requirement and amended advisory agreement at special meeting
Global Banking News-February 4, 2019-Bain Capital declares approval of lower asset coverage requirement and amended advisory agreement at special meeting
Ares Capital Corporation (NASDAQ: ARCC) has announced the completion of necessary amendments to its secured revolving facilities to allow it to reduce asset coverage requirement from 200% to 150%, the company said.
The most controversial aspect of the bill is that it would increase a BDC's ability to deploy capital to businesses by reducing its asset coverage ratio, or required ratio of assets to debt, from 200% to 150% if certain requirements are met.
The risk-based asset coverage amount is a cushion above the mark-to-market coverage amount reflecting the amount payable by the Fund if it were to exit the transaction under stressed conditions.
The definitive B1 rating assigned to the RCF issued by Lock AS reflects its positioning within the company's funding structure, significant asset coverage and level of seniority over other liabilities.
Misys solutions will help expand its asset coverage and reduce operational risk with better automation of regulatory reporting."
The report also said apart from this, another 26 per cent comes from corporates with weaker credit metrics whose asset coverage ratios are low and financial flexibility of the promoter is also limited.
The bank said it maintained its conservative approach to non-performing asset recognition and provisioning in line with both best practice and UAE Central Bank guidelines, ensuring a healthy pre-collateral non-performing asset coverage ratio of 70.2 per cent.