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 ?
Key terms: Mandatory tin hedging, minimum liquidity and standard debt service ratios.
Fitch expects Malopolska's direct debt to grow from 2018 following investments, but to remain moderate at below 60% of current revenue in the medium term, accompanied by healthy debt service ratios. In nominal terms, debt may increase to PLN600 million in 2021.
"Under the illustrative scenario, the debt sustainability outlook is affected by the worsening of the present value (PV) of public debt-to-GDP ratio and the external debt service ratios," he added.
class="MsoNormalThe FT also says that while Kenyas national debt looks manageable in GDP terms, debt service ratios are worryingly high, particularly since the government continues to run a budget deficit of seven per cent.
Risks to the outlook stem primarily from legacy issues, including a possible resurgence of political instability, rising public debt and debt service ratios, and lack of control over external debt accumulation, including by state-owned enterprises (SOEs).
This is not our core view, however, as debt service ratios remain manageable at current levels.
External debt service ratios are also well below the peer median.
A loss of fiscal discipline leading to a continued and sustained increase in debt and debt service ratios and limited potential that Manitoba will return to a balanced budget and will stabilize its debt burden in the medium term could result in a deterioration of its current credit profile.
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.
On the other hand, the ratings could be upgraded if the city has the ability to prop up its operating performance and debt service ratios to the average levels seen in 2006-2008.
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.- TradeArabia News Service