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
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
- 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".