Debt-service coverage ratio

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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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
Structural enhancements of the instruments allow for a single-notch uplift from AT's Long-Term IDR, and include security ring-fencing protections and prudent covenants, namely debt to net present value and debt service coverage ratios.
Median adjusted loan-to-values in September have remained at approximately 60%, while median debt service coverage ratios have increased to 1.42.
Estimated cash flows generate high debt service coverage ratios. Under
Average debt service coverage ratios for loans originated during 2013 were on par with 2005 levels, but remained well above those seen in 2007, according to the latest research from CBRE Group, Inc.
The key triggers are monthly and quarterly Debt Service Coverage Ratios (DSCRs) that must be above four and six times respectively, based on a tested collections amount that is defined as the sum of Non-Turkish Flows plus the lesser of a) 25% of Turkish Collections and b) 17.6% of Non- Turkish Collections.
Debt service coverage ratios (DSCRs) remained solid, ranging from 1.2 to 1.4, with a median DSCR of 1.3.
"The reaffirmation is premised on the plantations' performance, which has fallen within our expectations, as well as loan-to-value (LTV) ratios and debt service coverage ratios (DSCRs) that commensurate with their respective ratings.
Also of note are annual changes in rents, staffing ratios and labor costs, other key cost items (raw food costs, management fees), and key financial performance indicators (operating margins, debt service coverage ratios, and current return on investment).
Guggenheim Loan Services, the loan servicer for the project reported debt service coverage ratios (DSCR) based on the trailing 12 months (TTM) average were 2.11x at May 2018, 1.95x at December 2017 and 1.96x at December 2016.
Solid debt service coverage ratios: under a Moody's base case scenario
The amendments, covering the pension funding requirement and the leverage and debt service coverage ratios, provide the company with additional flexibility.