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Coverage Ratios (coverage + ratio)
Selected AbstractsDesigning a Property Tax Reform Strategy for Sub-Saharan Africa: An Analytical Framework Applied to KenyaPUBLIC BUDGETING AND FINANCE, Issue 4 2000Roy Kelly Countries throughout Sub-Saharan Africa are exploring options to improve local property taxation. Using the case of Kenya, this article provides an analytical framework for designing an effective property tax reform strategy. The first section presents a general conceptual model of property tax revenues, identifying four critical ratios that ultimately determine the effectiveness of any property tax system,namely, the coverage ratio, the valuation ratio, the tax ratio, and the collection ratio. The second section applies this conceptual framework to the property tax system in Kenya, focusing on the status of these four ratios and outlining possibilities for improving each ratio. The article concludes by summarizing five basic lessons from the Kenyan analysis that can assist in the development of appropriate property tax reforms in other developing countries in Sub-Saharan Africa. [source] Determinants of Multifamily Mortgage DefaultREAL ESTATE ECONOMICS, Issue 3 2002Wayne R. Archer Option,based models of mortgage default posit that the central measure of default risk is the loan,to,value (LTV) ratio. We argue, however, that an unrecognized problem with extending the basic option model to existing multifamily and commercial mortgages is that key variables in the option model are endogenous to the loan origination and property sale process. This endogeneity implies, among other things, that no empirical relationship may be observed between default and LTV. Since lenders may require lower LTVs in order to mitigate risk, mortgages with low and moderate LTVs may be as likely to default as those with high LTVs. Mindful of this risk endogeneity and its empirical implications, we examine the default experience of 495 fixed,rate multifamily mortgage loans securitized by the Resolution Trust Corporation (RTC) and the Federal Deposit Insurance Corporation (FDIC) during the period 1991,1996. The extensive nature of the data supports multivariate analysis of default incidence in a number of respects not possible in previous studies. Consistent with our expectations, we find that LTV evidences no relationship to default incidence, while the strongest predictors of default are property characteristics, including three,digit ZIP code location and initial cash flow as reflected in the debt coverage ratio. The latter results are particularly interesting in that they dominated the influence of postorigination changes in the local economy. [source] Corporate Bankruptcy in Korea: Only the Strong Survive?FINANCIAL REVIEW, Issue 4 2000Paola Bongini G30/G32/G33 Abstract We analyze whether the build-up of financial vulnerabilities led listed Korean companies to bankruptcy. We find that pre-crisis leverage is systematically high for both poor performing/slow growing firms and for profitable/fast-growing firms. Pre-crisis leverage raises the probability of bankruptcy, which is lower for firms: (1) relying more on (renegotiable) bank credit; (2) with less inter-firm debt; and (3) having higher interest coverage ratios. Finally, none of these liquidity variables help predict bankruptcies for chaebol-firms, suggesting that liquidity constraints are more stringent for non-chaebol. Thus, in a systemic crisis it is not only the strong/healthy that survive. [source] The Future of Private EquityJOURNAL OF APPLIED CORPORATE FINANCE, Issue 3 2009Steve Kaplan A distinguished University of Chicago financial economist and longtime observer of private equity markets responds to questions like the following: ,With a track record that now stretches in some cases almost 30 years, what have private equity firms accomplished? What effects have they had on the performance of the companies they invest in, and have they been good for the economy? ,How will highly leveraged PE portfolio companies fare during the current downturn, especially with over $400 billion of loans coming due in the next three to five years? ,With PE firms now sitting on an estimated $500 billion in capital and leveraged loan markets shut down, are the firms now contemplating new kinds of investment that require less debt? ,If and when the industry makes a comeback, do you expect any major changes that might allow us to avoid another boom-and-bust cycle? Have the PE firms or their investors made any obvious mistakes that contribute to such cycles, and are they now showing any signs of having learned from those mistakes? Despite the current problems, the operating capabilities of the best PE firms, together with their ability to manage high leverage and the increased receptiveness of public company CEOs and boards to PE investments, have all helped establish private equity as "a permanent asset class." Although many of the deals done in 2006 and 2007 were probably overpriced, the "cov-lite" deal structures, deferred repayments of principal, and larger coverage ratios have afforded more room for reworking troubled deals. As a result of that flexibility, and of the kinds of companies that get taken private in leveraged deals in the first place, most troubled PE portfolio companies should end up being restructured efficiently, thereby limiting the damage to the overall economy. Part of the restructuring process involves the use of the PE industry's huge stockpile of capital to purchase distressed debt and inject new equity into troubled deals (in many cases, their own). At the same time the PE firms have been working hard to rescue their own deals, some have been taking significant minority positions in public companies, while gaining some measure of control. Finally, to limit overpriced and overlev-eraged deals in the future, and so avoid the boom-and-bust cycle that appears to have become a predictable part of the industry, the discussion explores the possibility that the limited partners and debt providers that supply most of the capital for PE investments will insist on larger commitments of equity by sponsors to their own funds and individual deals. [source] How To Choose a Capital Structure: Navigating the Debt-Equity DecisionJOURNAL OF APPLIED CORPORATE FINANCE, Issue 1 2005Anil Shivdasani In corporate offices as well as the classroom, there continues to be significant debate about the costs and benefits of debt financing. There is also considerable variation in corporate credit ratings, even among companies as large and successful as those that make up the S&P 500. Many companies have been reassessing how they manage their balance sheet and their rating agency relationships; and with the market's generally favorable response to recapitalizations and dividend increases, such financing issues are likely to receive even more attention. Underlying the diversity of corporate credit ratings is widespread disagreement about the "right" credit rating,a matter that is complicated by the fact that the cost of debt varies widely among companies with the same rating. Although credit ratings are clearly tied to measures of indebtedness such as leverage and coverage ratios, the most important factor in most industries is a company's size. For many mid-sized companies, an investment-grade rating can be attained only by making a large, equity-financed acquisition,or by making minimal use of debt. In this sense, the corporate choice of credit rating can be as much a strategic issue as a financial decision. Maintaining the right amount of financial fl exibility is a key consideration when determining the right credit rating for a given company (although what management views as value-preserving flexibility may be viewed by the market as value-reducing financial "slack"). A BBB rating will accommodate considerably more leverage (30,60%) in companies with fairly stable cash flows and limited investment requirements than in more cyclical or growth-oriented companies (10,20%). When contemplating taking on more leverage, companies should examine all major operating risks and view their capital structure in the context of an enterprisewide risk management framework. [source] Solvent-free synthesis of pseudopolyrotaxane and polyrotaxane: Efficient threading complexation of a cyclodextrin wheel and a linear polymer axle to yield pseudopolyrotaxane and its fixation to polyrotaxane by the direct grinding of a solid mixtureJOURNAL OF POLYMER SCIENCE (IN TWO SECTIONS), Issue 8 2007Runtao Liu Pseudopolyrotaxane was obtained through the grinding of a mixture of O -trimethyl-,-cyclodextrin and polytetrahydrofuran in a mortar by solvent-free synthesis, and it was fixed to stable polyrotaxane by a successive end-capping reaction with a bulky isocyanate by solid-state grinding in a mortar. Higher molecular weight polytetrahydrofurans (Mn > 1000) successfully produced corresponding polyrotaxanes in moderate yields and with moderate coverage ratios. O -Trimethyl-,-cyclodextrin and poly(ethylene glycol) also formed corresponding pseudopolyrotaxanes and polyrotaxanes by the grinding method. [source] | ||||||||||