Contingent covenant - Revision history

imported>Doug Williamson: Add links.

2022-09-10T20:40:04Z

Add links.

← Older revision		Revision as of 20:40, 10 September 2022
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	== See also ==		== See also ==
			* [[Contingency]]
			* [[Contingent]]
	* [[Covenant]]		* [[Covenant]]
	* [[Credit rating]]		* [[Credit rating]]

imported>Doug Williamson: Classify page.

2022-06-27T20:33:10Z

Classify page.

← Older revision		Revision as of 20:33, 27 June 2022
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	A common example is a contingent covenant linked with the borrower's credit rating.		A common example is a contingent covenant linked with the borrower's credit rating.


	The existence of such covenants is a very significant source of risk for borrowers which are close to the boundary where the covenant might be triggered, for example following any further deterioration in the borrower's credit rating.		The existence of such covenants is a very significant source of risk for borrowers which are close to the boundary where the covenant might be triggered, for example following any further deterioration in the borrower's credit rating.
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	== See also ==		== See also ==
			* [[Covenant]]
	* [[Credit rating]]		* [[Credit rating]]
	* [[Covenant]]
	* [[Maintenance covenant]]		* [[Maintenance covenant]]
	* [[Ratings trigger]]		* [[Ratings trigger]]
	* [[Springing covenant]]		* [[Springing covenant]]

			[[Category:Accounting,_tax_and_regulation]]
			[[Category:The_business_context]]

imported>Doug Williamson: Update.

2017-11-13T21:41:50Z

Update.

← Older revision		Revision as of 21:41, 13 November 2017
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	A contingent covenant is a covenant in borrowings documentation which is contingent on a particular event or measure.		A contingent covenant is a covenant in borrowings documentation which is contingent on a particular event or measure.

	A common example is a contingent covenant linked with the borrower's credit rating.		A common example is a contingent covenant linked with the borrower's credit rating.

	The existence of such covenants is very significant for borrowers which are close to the boundary where the covenant might be triggered, for example following any further deterioration in the borrower's credit rating.		The existence of such covenants is a very significant source of risk for borrowers which are close to the boundary where the covenant might be triggered, for example following any further deterioration in the borrower's credit rating.


	== See also ==		== See also ==

imported>Doug Williamson: Align with qualifications material.

2015-08-01T15:09:13Z

Align with qualifications material.

← Older revision		Revision as of 15:09, 1 August 2015
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	''Loan documentation.''		''Loan documentation.''

	A contingent covenant is a covenant which ~~comes into effect only if the borrower~~ is ~~doing badly, according to some pre-agreed~~ measure ~~or other test~~.		A contingent covenant is a covenant in borrowings documentation which is contingent on a particular event or measure.
			A common example is a contingent covenant linked with the borrower's credit rating.
	~~Its purpose~~ is ~~to allow the borrower to retain operational flexibility while its credit remains strong, but to allow the lender to impose restrictions on~~ the borrower's ~~flexibility when restrictions or renegotiations become appropriate~~.

			The existence of such covenants is very significant for borrowers which are close to the boundary where the covenant might be triggered, for example following any further deterioration in the borrower's credit rating.

	== See also ==		== See also ==
			* [[Credit rating]]
	* [[Covenant]]		* [[Covenant]]
	* [[Maintenance covenant]]		* [[Maintenance covenant]]
			* [[Ratings trigger]]
	* [[Springing covenant]]		* [[Springing covenant]]

imported>Doug Williamson: Amend to 'according to'.

2015-07-26T18:30:59Z

Amend to 'according to'.

← Older revision		Revision as of 18:30, 26 July 2015
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	''Loan documentation.''		''Loan documentation.''

	A covenant which comes into effect only if the borrower is doing badly, ~~measured by~~ some pre-agreed measure or other test.		A contingent covenant is a covenant which comes into effect only if the borrower is doing badly, according to some pre-agreed measure or other test.

	Its purpose is to allow the borrower to retain operational flexibility while its credit remains strong, but to allow the lender to impose restrictions on the borrower's flexibility when restrictions or renegotiations become appropriate.		Its purpose is to allow the borrower to retain operational flexibility while its credit remains strong, but to allow the lender to impose restrictions on the borrower's flexibility when restrictions or renegotiations become appropriate.

imported>Doug Williamson: Create the page. Sources: Pingyang Gao, University of Chicago, August 2011 http://faculty.chicagobooth.edu/workshops/accounting/past/pdf/GaoConservatismV3.pdf; Klaus M Schmidt, University of Munich 2008: http://www.et.econ.uni-muenchen.de/personen/pr

2015-07-26T18:22:56Z

Create the page. Sources: Pingyang Gao, University of Chicago, August 2011 http://faculty.chicagobooth.edu/workshops/accounting/past/pdf/GaoConservatismV3.pdf; Klaus M Schmidt, University of Munich 2008: http://www.et.econ.uni-muenchen.de/personen/pr

New page

''Loan documentation.''

A covenant which comes into effect only if the borrower is doing badly, measured by some pre-agreed measure or other test.

Its purpose is to allow the borrower to retain operational flexibility while its credit remains strong, but to allow the lender to impose restrictions on the borrower's flexibility when restrictions or renegotiations become appropriate.

== See also ==
* [[Covenant]]
* [[Maintenance covenant]]
* [[Springing covenant]]