Covenant: Difference between revisions
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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. | ||
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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. | ||
Revision as of 15:13, 25 March 2021
1. Law.
A formal legal agreement to take, or not to take, certain actions.
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.
For example, a financial covenant to maintain a minimum ratio of net worth to debt.
3. Pensions.
In relation to pension funds, the credit strength of the sponsoring employer and its commitment to the pension fund.
See also
- Acceleration
- Accounting exposure
- Asset cover
- Breach of covenant
- Clause
- Compliance
- Condition
- Contingent covenant
- Covenant trigger
- Covenant-lite
- Credit risk
- Event of default
- Financial covenant
- Generally accepted accounting principles
- Grace period
- Headroom
- Incurrence covenant
- Interest cover
- Loan agreement
- Maintenance covenant
- Net worth
- Non-financial covenant
- Representations
- Restrictive covenant
- Term
- Trigger event
- Waiver
- Warranty
