Bond Covenant

Filed Under » , ,
Dictionary Says

Definition of 'Bond Covenant'

A legally binding term of an agreement between a bond issuer and a bond holder. Bond covenants are designed to protect the interests of both parties. Negative or restrictive covenants forbid the issuer from undertaking certain activities; positive or affirmative covenants require the issuer to meet specific requirements.
Investopedia Says

Investopedia explains 'Bond Covenant'

Possible bond covenants might include restrictions on the issuer's ability to take on additional debt, requirements that the issuer provide audited financial statements to bond holders and limitations on the issuer's ability to make new capital investments. When an issuer violates a bond covenant, it is considered to be in technical default. A common penalty for violating a bond covenant is the downgrading of a bond's rating, which could make it less attractive to investors and increase the issuer's borrowing costs.
Search results for

'Bond Covenant'

  • Why might a bond agreement limit the amount of assets that the ...

    http://www.investopedia.com/ask/answers/09/bond-covenant-lease.asp
    ... Reprints Reprints. Feedback Feedback. Why might a bond agreement limit the
    amount of assets that the firm can lease? Bond covenants ...

  • Municipal Bond Tips For The Series 7 Exam

    http://www.investopedia.com/articles/professionaleducation/07/Series_7_municipal.asp
    ... Insurance Covenant, The trust indenture specifies the property/casualty
    insurancee coverage for ... This section describes the put provisions (if any) on the ...

  • Series 7 Study Guide - Portfolio Management - Revenue Bond ...

    http://www.investopedia.com/exam-guide/series-7/portfolio-management/revenue-bond-analysis.asp
    ... a project without a feasibility study, the players in the bond market would ... A rate
    covenant could specify user charges; An insurance covenant could specify how ...

  • Financial Statements: Long-Term Liabilities | Investopedia

    http://www.investopedia.com/university/financialstatements/financialstatements8.asp
    ... Limits on payment of dividends. For example, it is common for a bond covenant to
    require that no dividends are paid. Maintenance of certain ratios. ...

  • CFA Level 1 Study Guide - Fixed Income Investments - Bond Features ...

    http://www.investopedia.com/exam-guide/cfa-level-1/fixed-income-investments/bond-features.asp
    ... 13.13 Technical Analysis; 13.14 Using Price Multiples. 14. Fixed Income Investments:
    14.1 Introduction; 14.2 Bond Features; 14.3 Basic Coupon Structures; ...

  • CFA Level 1 Study Guide - Ethics and Standards - Standard II-A ...

    http://www.investopedia.com/exam-guide/cfa-level-1/ethics-standards/standard-nonpublic-information.asp
    ... 13.13 Technical Analysis; 13.14 Using Price Multiples. 14. Fixed Income Investments:
    14.1 Introduction; 14.2 Bond Features; 14.3 Basic Coupon Structures; ...

  • What is the short/current long-term debt account on a company's ...

    http://www.investopedia.com/ask/answers/06/currentportionlongtermdebt.asp
    ... For example, suppose ABC Company issues a $100 million bond that matures in 10 years
    with the covenant that it must make equal repayments over the life of the ...

  • A Guide To Faith-Based Investing

    http://www.investopedia.com/articles/stocks/12/investing-and-faith.asp
    ... institutions have direct investments in the stock and bond markets, real ... provide
    "Christian-based, socially screened" investments, and New Covenant Funds makes ...

  • CFA Level 1 Study Guide - Liabilities - Capital And Operating ...

    http://www.investopedia.com/exam-guide/cfa-level-1/liabilities/capital-operating-leases.asp
    ... 13.13 Technical Analysis; 13.14 Using Price Multiples. 14. Fixed Income Investments:
    14.1 Introduction; 14.2 Bond Features; 14.3 Basic Coupon Structures; ...

  • Earnings Quality: Why Aren't All Earnings Equal? | Investopedia

    http://www.investopedia.com/university/accounting-earnings-quality/earnings3.asp
    ... contractual agreements have incentive to reduce the probability of covenant violation,
    specifically ... want to present data to influence stock or bond prices in ...

Related Articles

Partner Links