Leveraged Finance Ratios
Does Interest Coverage Ratio only include Cash interest?
Does Debt Service Coverage Ratio only include cash interest and ignore PIK Interest?
Can anyone confirm either way? Also, Is EBITDA the numerator in these ratios, or is it EBITDA - Capex?
1) yes should be just cash
2) similarly as #1 yes should be just cash baked in
- The PIK accrual will be reflected in DSCR for the period it is paid out (bullet maturity) and in the leverage ratios throughout the forecast periods.
3) if it's EBITDA - CapEx it would specify. You may see both separately since EBITDA - CapEx is a close proxy for FCF
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