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Protective Covenant |
Also found in: Encyclopedia | 0.01 sec. |
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Protective covenant A part of an indenture or loan agreement that limits certain actions a company may take during the term of the loan to protect the lender's interests. 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.
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