A test that is used to determine whether or not a company will be allowed to issue bonds. This test is calculated by subtracting a company's current liabilities from its net assets and then dividing the quantity by its total debts and / or preferred stock obligations. This can be expressed either as a dollar amount or as a percentage. Typically, a higher asset coverage test is preferable because this will indicate that the level of debt is low in comparison to net assets.
Related information about asset-coverage test:
- Asset-Coverage Test - Financial Dictionary - The Free Dictionary
A bond indenture restriction that permits additional borrowing if the ratio of assets to debt does not fall below a specified minimum.
- Asset Coverage Test - Financial Dictionary - The Free Dictionary
A bond indenture restriction that permits additional borrowing if the ratio of assets to debt does not fall below a specified minimum.
- What is asset-coverage test? definition and meaning
Definition of asset-coverage test: A test that is used to determine whether or not a company will be allowed to issue bonds. This test is calculated by subtracting a ...
- frequently asked questions about covered bonds - Morrison Foerster
the asset coverage test, and the occurrence of certain insolvency events. The covered bond indenture trustee performs a monthly proceeds compliance test to ...
- Asset-Coverage Test Definition
Asset-Coverage Test Restriction placed through bond indenture that allows for additional borrowing provided asset to debt ratio is consistently above a.
- Northern Rock covered | FT Alphaville
Jul 1, 2009 ... The Asset Coverage Test is designed to ensure that at each calculation date, the adjusted aggregate mortgage loan amount in the cover pool is ...
- U.S. Treasury Names Asset Managers and Launches Legacy
Jul 13, 2009 ... If a Half-Turn Election is in effect, subject to compliance with the “Asset Coverage Test” and “Leverage Test” described below, a Partnership can ...
- PDF Document (33k) - National bank of Canada
Apr 30, 2011 ... Asset Coverage Test (C$ ). Outstanding Covered Bonds. $994,100,000. A = Lesser of (i) LTV Adjusted True Balance and. $1,494,133,524 ...