Covenant - Revision history

Doug: Improve linking.

2025-03-30T10:44:29Z

Improve linking.

← Older revision		Revision as of 10:44, 30 March 2025
Line 73:		Line 73:
	* [[Term]]		* [[Term]]
	* [[Trigger event]]		* [[Trigger event]]
			* [[Uncovenanted]]
	* [[Waiver]]		* [[Waiver]]
	* [[Warranty]]		* [[Warranty]]
Line 83:		Line 84:
	*[https://www.ifrs.org/projects/completed-projects/2022/classification-of-debt-with-covenants-as-current-or-non-current-ias-1/#published-documents IFRS webpage - Non-current liabilities with Covenants (Amendments to IAS 1)]		*[https://www.ifrs.org/projects/completed-projects/2022/classification-of-debt-with-covenants-as-current-or-non-current-ias-1/#published-documents IFRS webpage - Non-current liabilities with Covenants (Amendments to IAS 1)]
	*[http://www.treasurers.org/node/8842 Treasury Essentials: Covenants, The Treasurer, March 2013]		*[http://www.treasurers.org/node/8842 Treasury Essentials: Covenants, The Treasurer, March 2013]

	~~[[Category:Long_term_funding]]~~
	~~[[Category:Manage_risks]]~~
	~~[[Category:Risk_frameworks]]~~
	~~[[Category:Treasury_operations_infrastructure]]~~

	[[Category:Long_term_funding]]		[[Category:Long_term_funding]]

Doug: Add resources.

2025-01-20T12:24:59Z

Add resources.

← Older revision		Revision as of 12:24, 20 January 2025
Line 77:		Line 77:


	==Other ~~resource~~==		==Other resources==

			*[https://www.slaughterandmay.com/media/3sdgesby/seeds_of_change__loan_financing_in_2024_4850pdf.pdf Seeds of Change: Loan financing in 2024 - Slaughter and May]
			*[https://www.iasplus.com/en-gb/news/2022/10/iasb-finalises-amendments-to-ias-1-regarding-the-classification-of-debt-with-covenants Deloitte UK Accounting Plus - Non-current liabilities with Covenants (Amendments to IAS 1)]
			*[https://www.ifrs.org/projects/completed-projects/2022/classification-of-debt-with-covenants-as-current-or-non-current-ias-1/#published-documents IFRS webpage - Non-current liabilities with Covenants (Amendments to IAS 1)]
	*[http://www.treasurers.org/node/8842 Treasury Essentials: Covenants, The Treasurer, March 2013]		*[http://www.treasurers.org/node/8842 Treasury Essentials: Covenants, The Treasurer, March 2013]

			[[Category:Long_term_funding]]
			[[Category:Manage_risks]]
			[[Category:Risk_frameworks]]
			[[Category:Treasury_operations_infrastructure]]

	[[Category:Long_term_funding]]		[[Category:Long_term_funding]]

Doug: Layout.

2025-01-19T16:32:34Z

Layout.

← Older revision		Revision as of 16:32, 19 January 2025
Line 77:		Line 77:


	==Other ~~links~~==		==Other resource==
	[http://www.treasurers.org/node/8842 Treasury Essentials: Covenants, The Treasurer, March 2013]		*[http://www.treasurers.org/node/8842 Treasury Essentials: Covenants, The Treasurer, March 2013]

	[[Category:Long_term_funding]]		[[Category:Long_term_funding]]

Doug: Links ordering.

2025-01-19T12:43:06Z

Links ordering.

← Older revision		Revision as of 12:43, 19 January 2025
Line 48:		Line 48:
	* [[Contingent covenant]]		* [[Contingent covenant]]
	* [[Contract]]		* [[Contract]]
			* [[Covenant-lite]]
	* [[Covenant trigger]]		* [[Covenant trigger]]
	* [[Covenant-lite]]
	* [[Credit risk]]		* [[Credit risk]]
	* [[Current liabilities]]		* [[Current liabilities]]

Doug: Add link.

2025-01-19T12:40:27Z

Add link.

← Older revision		Revision as of 12:40, 19 January 2025
Line 14:		Line 14:

	Breach - or potential breach - of such a covenant is designed to act as an early warning indicator of potential problems.		Breach - or potential breach - of such a covenant is designed to act as an early warning indicator of potential problems.


			:<span style="color:#4B0082">'''''Amendments to IAS 1: Non-current liabilities with covenants'''''</span>

			:"Borrowers [need] to bear in mind how covenant packages in lending arrangements will be reflected in or impact their financial statements for accounting periods starting on or after 1 January 2024.

			:[The amendments change] the criteria for the classification of a loan as a current or non-current liability, which depends on the entity's compliance with covenant tests on or before the accounting date...

			:... it is not clear whether the [changes] would have the effect of bringing forward future covenant tests, requiring them to be notionally tested at the end of the accounting period by reference to then-existing facts and circumstances, even if not contractually due to be tested until a later date...

			:Of broader relevance is a new requirement... to disclose information about covenants to which non-current liabilities are subject and are tested after the balance sheet date...

			:This means that all borrowers with loans that are subject to covenants that are applicable within 12 months of the accounting date will need to outline those in disclosures to their accounts..."

			:''Slaughter and May - Seeds of change: Loan financing in 2024, p10.''



Line 25:		Line 41:
	* [[Accounting exposure]]		* [[Accounting exposure]]
	* [[Asset cover]]		* [[Asset cover]]
			* [[Bond]]
	* [[Breach of covenant]]		* [[Breach of covenant]]
	* [[Clause]]		* [[Clause]]
Line 34:		Line 51:
	* [[Covenant-lite]]		* [[Covenant-lite]]
	* [[Credit risk]]		* [[Credit risk]]
			* [[Current liabilities]]
	* [[Default]]		* [[Default]]
			* [[Documentation]]
	* [[Event of default]]		* [[Event of default]]
	* [[Financial covenant]]		* [[Financial covenant]]
Line 42:		Line 61:
	* [[Incurrence covenant]]		* [[Incurrence covenant]]
	* [[Interest cover]]		* [[Interest cover]]
			* [[Loan]]
	* [[Loan agreement]]		* [[Loan agreement]]
	* [[Maintenance covenant]]		* [[Maintenance covenant]]
	* [[Net worth]]		* [[Net worth]]
			* [[Non-current liabilities]]
			* [[Non-current Liabilities with Covenants]]
	* [[Non-financial covenant]]		* [[Non-financial covenant]]
	* [[Representations]]		* [[Representations]]

Doug: Add link.

2024-03-24T02:59:46Z

Add link.

← Older revision		Revision as of 02:59, 24 March 2024
Line 30:		Line 30:
	* [[Condition]]		* [[Condition]]
	* [[Contingent covenant]]		* [[Contingent covenant]]
			* [[Contract]]
	* [[Covenant trigger]]		* [[Covenant trigger]]
	* [[Covenant-lite]]		* [[Covenant-lite]]

imported>Doug Williamson: Add link.

2021-11-23T07:35:00Z

Add link.

← Older revision		Revision as of 07:35, 23 November 2021
Line 33:		Line 33:
	* [[Covenant-lite]]		* [[Covenant-lite]]
	* [[Credit risk]]		* [[Credit risk]]
			* [[Default]]
	* [[Event of default]]		* [[Event of default]]
	* [[Financial covenant]]		* [[Financial covenant]]

imported>Doug Williamson: Expand 2nd definition.

2021-08-05T11:56:18Z

Expand 2nd definition.

← Older revision		Revision as of 11:56, 5 August 2021
Line 4:		Line 4:


	2. ''~~Loan~~ documentation.''		2. ''Debt documentation - loan documentation - bond documentation.''

	In ~~loan~~ documentation, ~~a promise given by~~ the ~~borrower to take, or not to take, specified actions relevant~~ to the borrower~~'s creditworthiness~~.		In debt documentation, covenants are generally about protecting the lender-investor against an increase in their credit risk relating to the borrower.

	For example, a ''financial covenant'' to maintain a minimum ratio of net worth to debt.		In this context, covenants are generally promises given by the borrower to take - or not to take - specified actions relevant to the borrower's creditworthiness.

			For example, a borrower's ''financial covenant'' to maintain a minimum ratio of net worth to debt.


			Breach - or potential breach - of such a covenant is designed to act as an early warning indicator of potential problems.

imported>Doug Williamson: Add link.

2021-03-26T21:51:47Z

Add link.

← Older revision		Revision as of 21:51, 26 March 2021
Line 41:		Line 41:
	* [[Representations]]		* [[Representations]]
	* [[Restrictive covenant]]		* [[Restrictive covenant]]
			* [[Sponsor]]
	* [[Term]]		* [[Term]]
	* [[Trigger event]]		* [[Trigger event]]

imported>Doug Williamson: Add headers.

2021-03-25T15:13:52Z

Add headers.

← Older revision		Revision as of 15:13, 25 March 2021
Line 1:		Line 1:
	1.		1. ''Law.''

	A formal legal agreement to take, or not to take, certain actions.		A formal legal agreement to take, or not to take, certain actions.


	2.		2. ''Loan documentation.''

	In loan documentation, a promise given by the borrower to take, or not to take, specified actions relevant to the borrower's creditworthiness.		In loan documentation, a promise given by the borrower to take, or not to take, specified actions relevant to the borrower's creditworthiness.
Line 11:		Line 11:


	3.		3. ''Pensions.''

	In relation to pension funds, the credit strength of the sponsoring employer and its commitment to the pension fund.		In relation to pension funds, the credit strength of the sponsoring employer and its commitment to the pension fund.