Catalog

	Table of Contents
p. 171 of 203 BACK | NEXT Foreword 1. Introduction to the Guidelines 2. User Instructions 3. Preparing and Appraising Investment Project 4. Financial Management of Executing Agencies 5. Reporting and Auditing 6. Financial Institutions 7. Knowledge Management 7.1. Useful Websites 7.2. Operations Manual (OM) 7.3. Project Administration Instructions (PAIs) 7.4. International Standards 7.5. International Accounting and Auditing Architecture 7.6. Financial Review Checklist for RRPs 7.7. Appraisal Checklist: Nonrevenue-Earning Project 7.8. Appraisal Checklist: Revenue-Earning Project 7.9. Appraisal Checklist: Private Sector Project 7.10. Appraisal Checklist: Financial Institution 7.11. Undertaking Sensitivity and Risk Analyses 7.12. Model Operating Covenants 7.13. Model Capital Structure Covenants 7.13.1. Debt Service Coverage (Version A: Historical orientation) 7.13.2. Debt Service Coverage (Version B: Forecast orientation) 7.13.3. Debt-Equity Ratio 7.13.4. Capital Adequacy Ratio 7.14. Model Liquidity Covenants 7.15. Commonly Used Ratios 7.16. Model Financial Statements: Service Organization 7.17. Model Financial Statements: Manufacturing Organization 7.18. Model Terms of Reference for an Auditor 7.19. Audit Report Questionnaire Addendum

Financial Management and Analysis of Projects : 7. Knowledge Management : 7.13. Model Capital Structure Covenants

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7.13.4. Capital Adequacy Ratio (see 3.6.3.6)

1. For the purposes of this Loan Agreement, all financial calculations, ratios and financial covenants shall be applied in respect of the Borrower's Operations only.
2. Except as ADB shall otherwise agree, the Borrower shall not make an advance to a subborrower [including leasing of an asset], if after the making of any such advance [or lease], the ratio of its equity to its assets-at-risk shall be greater than ____to____.
3. For purposes of this Section,
   1. The term "equity" means the sum of the total of unimpaired paid-up capital, retained earnings, and reserves of the borrower available to meet any losses which may be incurred by non-recovery of assets, including provisions for bad and doubtful debts and loan [and lease] losses at the date of making such advance [lease] in (a) above;
   2. The term "assets-at-risk" means the sum of the total impaired value of assets at the date of making such advance [lease] in (b) above;
   3. The term "impaired value of assets" in (ii) above means the value of each asset of the borrower valued in accordance with sound and consistently maintained methods of valuation satisfactory to ADB.

Back 7.13.3. Debt-Equity Ratio	Next 7.14. Model Liquidity Covenants