Kingsway Financial Services Inc. (NYSE:KFS) Q3 2023 Earnings Call Transcript

JT Fitzgerald: Yes. Certainly, if interest coverage was below 1x, that would be not good. So we would absolutely pull back. But it is a good question. I think that it’s important to point out that each one of our acquisitions is financed independently. And so, for instance, the DDI debt that we just used to support that acquisition is non-recourse to Kingsway, the parent company, and it is secured only by the cash flows and assets of DDI. And that loan facility has financial covenants that include that sort of maximum senior leverage ratio and a fixed charge coverage ratio of like 1.2x, which includes both principal and interest. And so, we would never get anywhere close to 1x interest coverage at the sort of lower bound. And we’re kind of bound to a fixed charge coverage, which includes, again, both principal and interest of 1.2x. And when we model these things out, they have plenty of cash flow coverage on fixed charge.

James Carbonara: Got it. Yes, I think that’s it. I’m looking at the e-mail and I’m not seeing any additional questions in there. JT, had you finished answering the question?

JT Fitzgerald: Yes, that’s great. I think if there are no more questions, we’ll hand it back to the operator. Thank you, everybody, for participating on the call.

Operator: Thank you. This does conclude today’s conference, and you may disconnect your lines at this time. Thank you for your participation. Have a wonderful day.