Springing covenant: Difference between revisions
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Revision as of 12:46, 24 July 2015
A covenant in a loan agreement which becomes effective on the occurrence of a certain event in the future. Used to enable loan agreements to have lite covenants, typically to conform to other loans of the same borrower. A common springing event is the level of utilisation of a loan facility at which time covenants such as ICR and gearing come into effect.