Financial covenant: Difference between revisions
From ACT Wiki
Jump to navigationJump to search
imported>Doug Williamson m (Spacing) |
imported>Doug Williamson m (Category added 9/10/13 and spacing) |
||
| Line 6: | Line 6: | ||
Breach of a financial covenant would normally constitute an event of default. | Breach of a financial covenant would normally constitute an event of default. | ||
== See also == | == See also == | ||
| Line 12: | Line 13: | ||
* [[Headroom]] | * [[Headroom]] | ||
* [[Loan agreement]] | * [[Loan agreement]] | ||
[[Category:Legal_Documentation]] | |||
Revision as of 08:35, 9 October 2013
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.
