Financial covenant: Difference between revisions
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imported>Doug Williamson (Link with Translation risk page.) |
imported>Doug Williamson (Link with Interest rate risk page.) |
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* [[Frozen GAAP]] | * [[Frozen GAAP]] | ||
* [[Headroom]] | * [[Headroom]] | ||
* [[Interest rate risk]] | |||
* [[Loan agreement]] | * [[Loan agreement]] | ||
* [[Translation risk]] | * [[Translation risk]] | ||
[[Category:Treasury_operations_infrastructure]] | [[Category:Treasury_operations_infrastructure]] | ||
Revision as of 10:42, 15 October 2017
Loan documentation.
A clause in a loan agreement that commits the borrower to operate within predefined financial constraints.
For example, an interest cover covenant might state that interest cover will be no less than 3 times; the borrower promises that the ratio will always exceed the set figure.
Breach of a financial covenant would normally constitute an event of default.
