Covenant

What Does Covenant Mean?
A promise in an indenture, or any other formal debt agreement, that certain activities will or will not be carried out.

Investopedia explains Covenant
The purpose of a covenant is to give the lender more security. Covenants can cover everything from minimum dividend payments to levels that must be maintained in working capital.

Filed Under: Bonds, Fixed Income

Related Terms

Affirmative Covenant
Debt Limitation
Indenture
IOU
Liquidity
Negative Covenant
Project Completion Restriction
Restrictive Covenant
Security Agreement
Staple Financing
More Related Terms

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