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Definition of 'Affirmative Covenant'
A type of promise or contract which requires a party to do something. For example, a bond covenant that provides that the issuer will maintain adequate levels of insurance or deliver audited financial statements is an affirmative covenant.
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Investopedia explains 'Affirmative Covenant'
Affirmative (or positive) covenants can be compared to restrictive (or negative) covenants, which require a party not to do something, such as sell certain assets. In bond agreements, both affirmative and restrictive covenants are used to protect the interests of both issuer and bondholder.
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Search results for 'Affirmative Covenant'
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