Fitch's downgrade of the holding company ratings reflects a financial leverage and fixed-charge coverage ratio
profile that is no longer consistent with narrow notching.
Munich Re's fixed-charge coverage ratio
is expected to remain very strong given its solid earnings generation.
Even with MYR 11.4 million of expected capital expenditure for the refurbishment of Menara ExxonMobil in FY Dec 2016, the coverage ratios are expected to remain healthy, with the fixed-charge coverage ratio
maintained at about 7.20 times and the funds from operations (FFO) financing coverage ratio kept at around 0.30 times, i.e.
One example is a minimum fixed-charge coverage ratio
(which normally approximates the amount by which the entity's earnings exceed interest, principal payments on debt, and other payments usually determined by the lender).
The proposed issue will not affect the company's debt leverage and would modestly improve fixed-charge coverage ratio
. Both metrics will remain in line with the BBB- rating level, S&P said.
In most cases the fixed-charge coverage ratio
is seen as an extension of the more standard interest coverage ratio (often referred to as times interest earned), a ratio itself defined along the lines of a comparison of a company's operating earnings to its interest expenses.
- financial leverage of above 30% and fixed-charge coverage ratio
consistently below 4x; and
As at end-December 2013, its debt-to-asset ratio stood at 17.6% while its fixed-charge coverage ratio
stood strong at 6.54 times.
Fitch expects the new issue to have a limited effect on Groupama's fixed-charge coverage ratio
. An addition of EUR500 million debt at a coupon of 3.375% would result in a pro-forma fixed charge coverage (excluding non-recurring items) of around 3x, which remains weak relative to the group's rating.
--GAAP fixed-charge coverage ratio
in the 12x to 14x range;
We also believe Lotte's weaker-than-peer fixed-charge coverage ratio
is partly offset by the substantial rental income it receives, which has consistently been above the rental expense amount.
Its FFO fixed-charge coverage ratio
may drop slightly to 2.4x in 2018-2019 from 2.6x in 2017.