Bond Interest Coverage Ratio

What is a Bond Interest Coverage Ratio

Bond Interest Coverage Ratio is a measure of the issuerÕs liquidity. It demonstrates how many times the issuerÕs earnings will cover their bond interest expense.

SecuritiesCE Explains Bond Interest Coverage Ratio

Most bonds that are issued pay interest to the bondholder on a semi-annual basis, and the amount of interest is based on a $1000 par value. The bond coverage ratio looks at how many times the issuer’s income would cover the interest payments due on the bonds. The higher the ratio the more liquid the issuer is.

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