(e) Debt service coverage

Debt service coverage and bond interest

Lower interest rates on loans are available in capital markets to borrowers who have ample debt service coverage , which is defined as total revenues available for debt service as a percentage of the required debt service.

debt service coverage reduces the financial risk to investors and translates into lower borrowing costs for the borrower.

Debt service ratio

Level annual debt service

Debt service current revenue

In order to achieve the ample debt service coverage and taking into account the historical pattern of assessment payments by Member States, investors would probably require 250 per cent of the normally required debt service percentage to be set aside from assessment payments early in the calendar year, thereby allowing the total annual debt service requirement to be reached more quickly every year.

Ample debt service coverage for a United Nations bond could be created by permitting the trustee to set aside a higher than required percentage of assessment payments tendered by Member States to permit the accelerated collection by the bond trustee of the total annual debt service requirement.

Overall, short term debt and total debt service also declined.

Debt service exports goods and services

To address the debt burden problem, many African countries at first resorted to repeated debt rescheduling which focused on debt service flows, resulting in steadily increasing debt stocks and related service payments.

A number of partial studies point to shrinking health service coverage among younger groups.

The portion of the assessment due for plan debt service, or assessed plan debt service , would be 10 per cent of 52 million, or 5.2 million.

39. In 1997, four low income countries concluded debt and debt service reduction agreements with commercial banks.

Haiti Stock of arrears and projected debt service, 2000 2005

Currently its debt service status amounts to 115 million annually.

Construction fund earnings would be applied to the annual debt service requirement, thereby reducing the net annual debt service to be met by the set aside procedure.

20. One of the main obstacles to sustainable development was the debt overhang and the debt service payment.

The ratios of debt service to exports and debt stock to GNP also point towards an improved position.

The situation is further exacerbated by the country's debt service problems.

The end result of providing ample debt service coverage in the manner described above would be a high to medium grade credit rating for the United Nations loan, which would in turn reduce the overall cost of borrowing.

Although Mexico s traditional debt indicators appeared sustainable, with moderate ratios of debt service, debt stock to exports and interest payments to exports (a ratio similar to the debt service ratio), the ratio of short term debt to reserves amounted to 131 per cent in 1997 (the ratio was much higher in 1996).

Debt reduction, either through stock of debt reduction or debt service reduction based on a concessional rescheduling, will continue to be considered only in exceptional cases.

Moreover, when countries had no capacity to service their external debt, debt cancellation did not generate more resources for development, although it did improve debt indicators.

36. Africa s external debt burden is the highest among developing countries in terms of the ratio of external debt to GDP and its debt service ratio.

In Lebanon, persisting high levels of public debt forced the Government to direct much of its expenditure towards debt service.

Noting with concern the continuing debt and debt servicing problems of heavily indebted developing countries as constituting an element that adversely affects their development efforts and economic growth, and stressing the importance of alleviating once and for all, where applicable, their onerous debt and debt service burden with the aim of attaining a sustainable level of debt and debt service,

The combination of all these factors contributed to an acceleration of government debt accumulation and made debt service difficult or impossible.

Mobile phone coverage came to the region several months ago, and at least one villager has working service.

Identifying and remaining vigilant to the existence of disparities in health service coverage constitutes an important starting point.

Current trends in the provision of services remain insufficient to achieve full service coverage in the near future.

Resulting media coverage included, among others, the BBC World Business Report and World Service, and the Financial Times.

Almost all the revenues collected in 1997 were consumed by debt service payments.

In addition to coverage disparities between countries and regions, there are significant inequities within countries clear rural urban disparities as well as coverage and service level disparities between richer and poorer households.

In some countries Argentina, Ecuador and the Russian Federation the debt crisis led to a suspension of payments or defaults on debt service.

Of the 42 countries qualified as potentially eligible for debt relief in September 2004, 27 had received debt service relief of 32 billion.

For instance, the SADC countries have a total debt stock of 78.1 billion, with an annual total debt service amounting to 6.8 billion.

2. Debt service problems of middle and low income countries High social cost incurred in the efforts to fulfil commitments on debt servicing

In addition, however, the level of external debt, the debt service burden, and the availability of foreign assistance assume particular importance in Africa.

Thus debt service is a significant item in affecting net resource flows to Africa, and Africa s debt servicing difficulties have long been recognized.

Developing countries today are paying enormous amounts just to service the interest on debt.

In addition, external balance of payments assistance was suspended and debt service payments rose.

The working group noted that coverage of existing systems and equipment was included under the line item, market data service.

The service has received positive feedback, but severe limitations in coverage and flexibility have made it difficult to obtain financing.