A loan covenant is a condition in a commercial loan or bond issue that requires the borrower to fulfill certain conditions or which forbids the borrower from undertaking certain actions, or which possibly restricts certain activities to circumstances when other conditions are met.
Typically, violation of a covenant may result in a default on the loan being declared, penalties being applied, or the loan being called. The legal provision in the loan agreement providing for the loan to be "called" is the "acceleration clause": once the buyer defaults, all future payments due under the loan are "accelerated" and deemed to be due and payable immediately. [1]
Covenants may also be waived, either temporarily or permanently, usually at the sole discretion of the lender.
^Cornell Law School Legal Definition: Acceleration Clause
A loancovenant is a condition in a commercial loan or bond issue that requires the borrower to fulfill certain conditions or which forbids the borrower...
as loancovenants. Although this article focuses on monetary loans, in practice, any material object might be lent. Acting as a provider of loans is one...
rate of interest that a borrower must pay after material breach of a loancovenant. The default interest is usually much higher than the original interest...
tenure CovenantCovenant Against Encumbrances Covenant for Further Assurances Covenant of Quiet Enjoyment Covenant of Right to Convey Covenant of Seisin...
Return on investment Return on capital Return on assets Return on equity Loancovenant Cash conversion cycle Cash management Strategic financial management...
lender Covenants of the borrower Events of default Remedies in the event of default Provisions for penalties and liquidated damages For syndicated loans, provisions...
term loans because they have longer maturities and bullet repayment schedules. This institutional category also includes second-lien loans and covenant-lite...
leveraged transactions, if a firm cannot make its debt payments, meet its loancovenants or rollover its debt it enters financial distress which often leads...
portfolios. A negative judgment may also result in the breach of bank loancovenants or lead a debt rating firm to lower the rating on the company's debt...
strategic focus. Also, if a firm cannot make its debt payments, meet its loancovenants or rollover its debt it enters financial distress which often leads...
private secretary". Ranjitsinhji also came before the courts over an 1896 loancovenant in a dispute between four women and himself and three other people....
situations where GAAP-basis statements aren't necessary because of loancovenants, regulatory requirements or similar circumstances, an OCBOA may just...
generally, and specifically those related to any loancovenants, such as debt service coverage ratio (DSCR) and loan-to-value ratio (LTVR). In retail banking...
breach its bank loancovenants". Construction Enquirer. Retrieved 20 October 2017. "Interserve on verge of breaching financial covenants". The Construction...
relating to the loan such as loan purpose, credit rating, and loan-to-value ratio and estimates the effect on yield (credit spread). Covenants – Lenders may...
giving up the majority of their stock to creditors with whom they broke loancovenants. In 2017, Education Management Corporation reported that it had sold...
and the Boers in South Africa is covered at length in the 1980 novel The Covenant by American author James A. Michener. Boerboel Boerehaat Boer goat Boer...
notice from Longview Marquis Master Fund LP due to the breach of a loancovenant that required MRU to reduce its receivables to $5 million by January...
borrowing company generates as collateral for the loan. Cashflow loans are usually senior term loans or subordinated debt, being used for funding growth...
numerous high-profile interviews that the charity had breached one of its loancovenants before the Trudeau government selected it to administer the proposed...
cents in 2008, thus the NYSE indicated they might delist the company. Loancovenants could have forced the company into default. Robinson stepped down with...
remain identical, although some constraints – such as those imposed by loancovenants – may be more relevant here). The (short term) goals of working capital...
reality, and outputs must similarly be "bound" by regulatory limits. (Loancovenants in place will similarly impact corporate finance and M&A models.) Alternate...
Educational loan options include federal student loans, federal parent loans, private loans, and consolidation loans. Federal student loans are loans directly...
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