Debt-service coverage ratio

(redirected from Debt Coverage 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 ratings reflect the city's sustained fiscal performance, sound debt and debt coverage ratios as well as an expected increase in debt for 2018.
That could eventually weaken debt coverage ratios and cash flows for tax credit properties.
Under the NAIC methodology, individual mortgage ratings are based on debt coverage ratios, LTV and property type metrics.
adjusted by data available (with correlative effect on debt coverage ratios and
Going forward, the Group is expected to increase its debt load to facilitate investment in working capital and business acquisitions; its gearing and FFO debt coverage ratios are projected to average a respective 0.
Additionally, the company's new facility replaces its earlier USD15m secured revolving credit facility and contains some typical financial and other covenants and also, the company's ability to borrow under this facility is subject to compliance with the covenants and other restrictions on an ongoing basis, with the principle covenants limiting its level of debt and debt coverage ratios.
impact on SOCAR's leverage profile and debt coverage ratios.
If the region reinforces its debt coverage ratios and trim refinancing risk by extending its debt maturity profile, the agency may upgrade the ratings.
Thirdly, a company must pay holders of debt an interest rate, even if the company is loss-making--and failure to pay interest or to achieve debt coverage ratios may put the company into default and force a liquidation.
Cash debt coverage ratios of AM Corporation show that 27.
In addition, lender debt coverage ratios have readjusted to a minimum of 1.
The loan-to-value ratio and mortgage constant are used in both the band of investment and the Ellwood formula for developing overall rates, and debt coverage ratios are easily surveyed or acquired from mortgage research sources such as the American Council of Life Insurance Companies' Investment Bulletin.