Covenant: Difference between revisions
From ACT Wiki
Jump to navigationJump to search
imported>Doug Williamson (Link with Non-financial covenant page.) |
imported>Doug Williamson (Specify relevance of actions as relating to creditworthiness. Link with Credit risk page.) |
||
| Line 1: | Line 1: | ||
#A formal legal agreement to take, or not to take, certain actions. | #A formal legal agreement to take, or not to take, certain actions. | ||
#In loan documentation, a promise given by the borrower to take, or not to take, relevant | #In loan documentation, a promise given by the borrower to take, or not to take, specified actions relevant to the borrower's creditworthiness.<ref>http://www.treasurers.org/node/8842</ref> For example, a ''financial covenant'' to maintain a minimum ratio of net worth to debt. | ||
#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. | ||
| Line 7: | Line 7: | ||
* [[Accounting exposure]] | * [[Accounting exposure]] | ||
* [[Asset cover]] | * [[Asset cover]] | ||
* [[Credit risk]] | |||
* [[Event of default]] | * [[Event of default]] | ||
* [[Financial covenant]] | * [[Financial covenant]] | ||
Revision as of 15:42, 11 January 2014
- A formal legal agreement to take, or not to take, certain actions.
- In loan documentation, a promise given by the borrower to take, or not to take, specified actions relevant to the borrower's creditworthiness.[1] For example, a financial covenant to maintain a minimum ratio of net worth to debt.
- In relation to pension funds, the credit strength of the sponsoring employer and its commitment to the pension fund.
See also
- Accounting exposure
- Asset cover
- Credit risk
- Event of default
- Financial covenant
- Incurrence covenant
- Interest cover
- Loan agreement
- Maintenance covenant
- Net worth
- Non-financial covenant
- Restrictive covenant
- Waiver
References
Treasury Essentials: Covenants, The Treasurer, March 2013
