Contingent covenant: Difference between revisions
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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]] | ||
* [[Maintenance covenant]] | * [[Maintenance covenant]] | ||
* [[Ratings trigger]] | * [[Ratings trigger]] | ||
* [[Springing covenant]] | * [[Springing covenant]] | ||
[[Category:Accounting,_tax_and_regulation]] | |||
[[Category:The_business_context]] | |||
Revision as of 20:33, 27 June 2022
Loan documentation.
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.
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.
