(e) – Minimum Fixed Charge Coverage Ratio Clause Samples
The Minimum Fixed Charge Coverage Ratio clause requires a borrower to maintain a specified ratio of earnings to fixed financial obligations, such as interest and lease payments. In practice, this means the borrower must demonstrate, typically on a quarterly or annual basis, that their earnings are sufficient to cover these fixed charges by at least the agreed-upon multiple. This clause serves to protect lenders by ensuring the borrower remains financially stable and capable of meeting ongoing debt service requirements, thereby reducing the risk of default.
(e) – Minimum Fixed Charge Coverage Ratio. A. Adjusted EBITDA for the fiscal quarter ending on the Statement Date multipled by four (4): $________
B. Fixed Charges for the Calculation Period: $________
C. Fixed Charge Coverage Ratio (Line V.A divided by Line V.B): ____ to 1.0
(e) – Minimum Fixed Charge Coverage Ratio. A. Adjusted EBITDA for the fiscal quarter ending on the Statement Date multiplied by four (4): $
B. Fixed Charges for the Calculation Period: $
C. Fixed Charge Coverage Ratio (Line IV.A divided by Line IV.B): to 1.0
V. Section 9.13(f) – Unencumbered Leverage Ratio.
A. Total Unsecured Debt as of the Statement Date: $
B. Unencumbered Asset Value as of the Statement Date: $
C. Unencumbered Leverage Ratio (Line V.A divided by Line V.B): %