SEAQ and Springing covenant: Difference between pages

From ACT Wiki
(Difference between pages)
Jump to navigationJump to search
imported>Administrator
(CSV import)
 
imported>Doug Williamson
(Define 'lite' covenants.)
 
Line 1: Line 1:
Stock Exchange Automated Quotations system.
''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 ==
* [[Stock exchange automated quotation system]]
*[[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.


See also