Covenant
From ACT Wiki
1. A formal legal agreement to take, or not to take, certain actions.
2. In loan documentation, a promise given by the borrower to take, or not to take, relevant actions.[1] For example, a financial covenant to maintain a minimum ratio of net worth to debt.
3. 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
- Event of default
- Financial covenant
- Incurrence covenant
- Interest cover
- Loan agreement
- Maintenance covenant
- Net worth
- Restrictive covenant
- Waiver
