Fixed Charges

Last Updated: Jun 7, 2019

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Any type of fixed expense that recurs on a regular basis. For purposes of the fixed charge coverage ratio, fixed charges commonly include interest expense paid in cash, principal payments in respect of indebtedness for borrowed money and all “restricted payments” paid in cash. The universe of restricted payments will typically be addressed in the definitive loan documentation and might include, for example, dividends, management fees and payments of subordinated debt.