Suppose a company has an EBITDA of 150% to their interest payments

The interest coverage ratio is an important indicator for bond holders in order to be able to make sure that the company does continue to have the ability to pay back the interest on time.

So, when the EBITDA/Interest payment = 150%

That means the EBITDA is 1.5 time the interest payment so an average bond investor would not be comfortable with the idea that the company goes to raise further debt because generally the minimum acceptable interest coverage ratio is 2 and for different industries it will go up not down so the current interest coverage ratio is not sufficient and I as a bond investor would not be comfortable with the idea that the profits could double because these are estimations and they can be wrong.

Now if the competitors is going to invest in the same line of product and that will wipe out the profits then as a bond holder the company should not raise further debt because it can create a scenario where the company is not able to pay off its interest obligation and bankruptcy scenario could arise.