Debt Coverage Ratio Covenant

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Posted by John G on April 08, 2004 at 17:07:40:
I am in the final stages of arranging financing for an $800k retail shopping center in South Texas. The lender with the most agreeable terms I have seen (from an economical perspective) has a covenant that states that the loan would be in default if in any year the property's cash flow is less than 1.25x debt coverage. The lender says this is very standard although other people I have spoken to (including a real estate lawyer) do not agree. So my question is: is this standard?

Follow Ups:

Re: Debt Coverage Ratio Covenant Bess Cass 15:59:37 08/16/04 (0)

Re: Debt Coverage Ratio Covenant Val Hornibrook 16:19:48 08/09/04 (0)

Re: Debt Coverage Ratio Covenant ray@lcorn 10:29:10 04/09/04 (13)

Re: Debt Coverage Ratio Covenant Fran Farmer 00:26:05 11/16/04 (0)

Re: Debt Coverage Ratio Covenant Maisie Teaster 01:37:55 09/28/04 (0)

Re: Debt Coverage Ratio Covenant Agnes Sharon 17:51:40 08/31/04 (0)

Re: Debt Coverage Ratio Covenant Robert Kingston 18:37:27 08/26/04 (0)

Re: Debt Coverage Ratio Covenant John G 10:39:23 04/12/04 (0)

Nice Post! (nt) Eric C 13:51:14 04/09/04 (3)

Re: Nice Post! (nt) Edward Struthers 06:22:04 11/22/04 (0)

Re: Nice Post! (nt) Ern Gary 04:26:04 11/16/04 (0)

Re: Nice Post! (nt) Jimmie Wallace 23:25:15 07/31/04 (0)

Thanks for clarification, Ray Max in OH 13:23:36 04/09/04 (3)

Re: Thanks for clarification, Ray Jack Combes 16:05:48 11/15/04 (0)

Re: Thanks for clarification, Ray Diane Miller 09:36:56 10/14/04 (0)

Re: Thanks for clarification, Ray Steve Ward 08:31:00 09/28/04 (0)

Re: Debt Coverage Ratio Covenant Max in OH 07:46:41 04/09/04 (6)

Re: Debt Coverage Ratio Covenant Florrie Phillips 16:55:34 11/15/04 (0)

Re: Debt Coverage Ratio Covenant Les Stringer 10:22:51 10/14/04 (0)

Re: Debt Coverage Ratio Covenant Joseph Geddes 04:09:24 09/28/04 (0)

Re: Debt Coverage Ratio Covenant John G 08:48:07 04/09/04 (2)

Re: Debt Coverage Ratio Covenant Lesley Jamie 17:32:47 10/15/05 (0)

Re: Debt Coverage Ratio Covenant Chrissy Flight 18:13:37 11/15/04 (0)

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