Springing covenant

From ACT Wiki
Revision as of 12:46, 24 July 2015 by imported>Baseby2@msn.com (Loan covenant which is conditional)
(diff) ← Older revision | Latest revision (diff) | Newer revision → (diff)
Jump to navigationJump to search

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 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 and gearing come into effect.