Disbursement and Springing covenant: Difference between pages
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''Long term funding''. | |||
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 fewer and less onerous ('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 ([[interest cover]] ratio) and [[gearing]] come into effect. | |||
Springing covenants are a form of [[contingent covenant]]. | |||
== See also == | == See also == | ||
* [[ | *[[Incurrence covenant]] | ||
* [[ | *[[Maintenance covenant]] | ||
[[Category:Long_term_funding]] | |||
Revision as of 15:15, 1 August 2015
Long term funding.
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 fewer and less onerous ('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 (interest cover ratio) and gearing come into effect.
Springing covenants are a form of contingent covenant.
