Bond covenant

(redirected from Debt Covenants)

Bond covenant

A contractual provision in a bond indenture. A positive covenant requires certain actions, and a negative covenant limits certain actions.

Bond Covenant

An agreement between the issuer and holder of a bond, requiring or forbidding certain actions of the issuer. Positive covenants require actions while negative covenants forbid them. The exact terms of a bond covenant must be written in the bond indenture.
References in periodicals archive ?
As of December 31, 2017, the borrowings under the Credit Agreement and the term loan otherwise due in 2022 were classified as current on the balance sheet due to these uncertainties regarding the Company's ability to meet the existing debt covenants over the next twelve-month period.
The purpose of this paper is to investigate whether an association exists among monitoring, debt covenants, and the cost of debt and whether it has been affected by certain provisions of the Sarbanes-Oxley Act of 2002 (hereafter SOX).
Moody's Investors Service explains in a new Special Comment that the financial crisis and the resulting macroeconomic shock have exerted pressure on the compliance of banks with debt covenants.
VIOLATING DEBT COVENANTS an tarnish a company s credibility n the business community with lightning speed.
The firm's stock was down by as much as 15% but recovered after the company said it was comfortably within debt covenants and had no liquidity issues with any of its pension schemes.
We started with a clean slate, and I was able to help negotiate the loan agreement; create a comprehensive financial package for board meetings; design financial models that generated, tracked and projected the company's financial statements, debt covenants and liquidity; and design discounted cash flow models used for lease vs.
Prior studies conclude also that the majority of bond issues and private lending agreements use restrictive debt covenants that are based on accounting ratios and measures.
While AOL Time Warner executives have said debt covenants would not be affected by the none-cash charge, accounting experts say such charges can hurta company's debt rating as well as its ability to borrow.
They also bore fraud in mind when debt covenants were restrictive in a situation where income was better than expected.
The debt covenants restricted the amount of debt (other than certain short-term debt) that the parent and subsidiary could incur to a certain percentage of the parent's net tangible assets.
Companies must disclose violations of debt covenants and the negotiated outcomes with lenders to the Securities and Exchange Commission.
In an effort to reduce contracting costs, thus producing a net increase in the value of the firm through the use of covenants, Smith and Warner suggested that systematic patterns of debt covenants would exist across debt covenants.