A result of annual instalments covered by generated EBITDA calculated as per EBITDA/ Annual debt instalments either backwards (for last 12 Months) or on a roll-forward method. This ratio is very often used in project financing or Real-estate finance transactions, whereas min. DSCR of 1.25x may be required by the Bank to assure that Project […]

Earnings before Interests, Tax and Depreciation representing Operating cash flow of the company calculated based on Income statement, but not taking into account changes in Working capital (trade Receivables, Payables and Stocks). This value describes ability of the Company to generate cash directly from its operations, which is a key factor for ability of the […]

adverse situation under financing/other contract whereas client is in material breach as (i) conditions and stipulations of the contract were not respected or (ii) financial covenant was breached or (iii) the Borrower did not repay the scheduled installment. Such adverse situation would represent huge reputation damage for the Borrower, so that it may finds himself […]

Broadly speaking, events of default may occur where one party is at fault. The party at fault is known as the ‘defaulting party’, and the other party is referred to as the ‘non-defaulting party’. Upon the occurrence of an event of default, a party may elect to terminate all transactions under the ISDAMaster Agreement. The […]

interest rate set for entire period of deal life-time and does not underlie to any changes on interbank market thus fully eliminating the risk of potential changes in interbank rates. For the Borrower it represents a positive aspect that in case of long-term financing it can easily forecast and budget the future total loan installments. […]

Interest rate set based on market rate like PRIBOR, EURIBOR set for certain time period (1M, 3M, 6M, 12M…) very often used as a basis for short-term financing, however especially in cases of low market rates the Client prefer to receive floating rate even on a long-term financing thus exposing themselves to the risk of […]

Banks internal rate for funding the lending activities usually derived from Offer rate on interbank market resp. from real Costs of funds when such sources are not easily available on market (long tenor resp. intra-Group sources). Funding represents interest costs for the Bank. The credit agreements usually make reference to any market rate like PRIBOR, […]

Positive / Negative difference between purchase costs of assets and their fair market value depending on accounting standards that are locally applied (some assets like lands or trade receivables remain booked in original accounting value). If any difference as stated above occurs, this is referring to revaluation impairment. Further there can be also revaluation stemming […]

Added value on Intangibles representing discrete reserves of the Company is often called as Goodwill. This is very often created in moment, when for instance Company Lenovo buys part of IBM business, company or another its Division and pays for it substantially higher price then what is just the accounting value. Lenovo is willing to […]

in the analogy to the DSCR this is equivalent of above mentioned ratio just with minor difference with respect to measuring the annual installments of interests compared with EBIT (Earnings before Interests and Taxes). This ratio may be used in cases of Working capital financing (WCF), whereas no regular principal installments were scheduled as the […]