Ratio Compliance Clause Samples
The Ratio Compliance clause requires a party, typically a borrower, to maintain certain financial ratios as specified in the agreement. These ratios might include measures such as debt-to-equity, interest coverage, or current ratio, and are usually tested at regular intervals based on financial statements. By mandating adherence to these ratios, the clause helps ensure the ongoing financial health of the party and provides early warning to the other party, often a lender, if the borrower's financial position deteriorates, thereby managing credit risk.
Ratio Compliance. The Administrative Agent shall have received evidence satisfactory to it that as of June 30, 2024, on a pro forma basis giving effect to the Transactions to occur on the Closing Date and otherwise calculated on a pro forma basis mutually agreed by the Borrower, the Administrative Agent and the Lenders, the Asset Coverage Ratio was greater than or equal to 2.00 to 1.00.
Ratio Compliance. Any of clauses (i) or (ii) below shall exist as of a Reporting Date immediately following a Measurement Quarter, and, in any such case, not be cured in accordance with the Ratio Cure Procedures:
(i) the Debt Service Coverage Ratio is less than 1.25:1.00; or
(ii) the Debt Yield Ratio is less than 7.00%.
Ratio Compliance. Any of the following shall occur:
(i) the Debt Service Coverage Ratio is less than 1.25:1;
(ii) the Debt Yield Ratio is less than 7.0%;
(iii) the Loan To Value Ratio for Non-Stabilized Properties exceeds 60% for thirty (30) consecutive days after the most recent Quarterly Valuation; or
(iv) the Loan To Value Ratio for Stabilized Properties exceeds 60% for thirty (30) consecutive days after the most recent Quarterly Valuation.
Ratio Compliance. After giving effect to the consummation of such Permitted Acquisition, on a pro forma basis (excluding the cash proceeds of the Delayed Preferred Stock funded on the date of consummation of such Permitted Acquisition), the Corporation is in compliance with a pro forma Consolidated Total Net Leverage Ratio of 4.25 to 1.00 and a Total Preferred Leverage Ratio of 6.25 to 1.00;
Ratio Compliance. After giving effect to the Acquisition Closing Date Transactions, on a pro forma basis (excluding cash proceeds of any borrowings on the Acquisition Closing Date of Initial Term Loans and/or Delayed Draw Term Loans and the cash proceeds of the Initial Preferred Stock and the Acquisition Preferred Stock funded on the Acquisition Closing Date), the Corporation is in compliance with a pro forma Total Net Leverage Ratio of 4.25 to 1.00 and a Total Preferred Leverage Ratio of 6.25 to 1.00.
Ratio Compliance. Any of the following shall occur: