Debt service coverage


Also found in: Acronyms.

Debt service coverage

The ratio of cash flow available to the borrower to the annual interest and principal payments on a loan or other debt.

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 ?
Historically, O'Hare's financial operations have produced stable debt service coverage, at or slightly above 1.10x, (including fund balances) and the CPE was a competitive $16.63 in 2017.
are projected to provide 3.3X debt service coverage at the lowest point.
Fewer 2013 loans had a low stressed debt service coverage ratio or a high stressed loan-to-value ratio compared to the earlier periods."
In East Harlem, a 36-building portfolio bought by the Pinnacle Group saw its debt service coverage ratio on its $204 million loan fall to .35 at the end of September, a 12.5 percent decline from year end 2007.
UNF CREDIT PROFILE: Credit characteristics include stable to growing enrollment, adequate institutional debt service coverage, an adequate financial cushion and an improved state appropriation environment (Florida GOs rated AAA/Stable by Fitch).
Generating good debt service coverage without profitable operations is a difficult task.
STRONG DEBT SERVICE COVERAGE: The debt service coverage ratio (DSCR), as calculated by management using 12 months of trailing operating data was 2.24x as of Sept.
Estimated cash flows generate high debt service coverage ratios.
Beech Street was able to refinance the property with substantial debt service coverage savings and further increased savings with a significantly reduced interest rate.
The rating is based on the city's strong debt service coverage and healthy liquidity in the past three years, the agency said.
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).