This will weaken credit metrics such as post-maintenance and post-tax
interest cover (PMICR) and net debt to regulated asset base (RAB).
Summary: The median social housing lettings
interest cover ratio dipped to 1.
Moody's rating guidance for DP World's Baa3 rating and stable outlook is adjusted funds from operations (FFO)
interest cover between 3.
Calculation:
interest cover (a number) is derived by dividing the company's operating profit by the finance charge.
The financial covenants attached to the new facility are a minimum
interest cover of 4 times increasing in steps to 5 times from July 2013 and a maximum net debt to EBTIDA ratio of 2.
This would, in Moody's opinion, translate into FFO
interest cover that is constantly above 3.
Negative rating triggers include a net leverage sustained above 3x and funds from operations (FFO)
interest cover kept below 2x, or a sharp drop in market share.
Net yield = (rental income - costs)/purchase price 3
Interest cover.
Interest cover - The difference between actual rental income (less costs) and total mortgage repayments
Interest cover = net rent / interest costs 4.
Accordingly, the estimated year-end
interest cover ratio remains well below 1 time versus the expectation that
interest cover would strengthen towards 2 times.
This replaces the
interest cover covenant with a cash flow covenant and the documents extend the maturity of Barratt's pounds 400m credit facility from February 2010 to July 2011.
The fact Ahold had negotiated lower
interest cover than expected on the loan was seen as evidence more accounting revelations could be around the corner, while its decision to waive a dividend was "not encouraging".
