Affirmative covenant

Affirmative covenant

A bond covenant that specifies certain actions the firm must take.

Positive Covenant

A bond covenant that requires the issuer to take certain actions. For example, a positive covenant may require an issuer to maintain enough liquid assets to cover the principal of the bond. More commonly, a positive covenant requires the issuer to have a certain amount of insurance or submit to periodic audits. It contrasts with a negative covenant, which prevents the issuer from taking the enumerated actions. It is also called an affirmative covenant.
References in periodicals archive ?
247) The most popular affirmative covenant nowadays is an obligation to pay homeowners association fees to fund the maintenance of common premises.
Most bond agreements include an affirmative covenant of the tribe to maintain operation of the casino, which would provide some level of legal recourse for bondholders should a tribe attempt to close the gaming operation.
The new agreement provides for changes to specific terms of each of the loan facilities as well as to the affirmative covenants.
Retirement plan-related contract provisions include sellers' representations, affirmative covenants, negative covenants and, perhaps, indemnification-meaning the seller promises to pay for any loss or damages if a problem is found with a benefit plan.
Affirmative covenants require the borrower to do something, such as periodically submit financial statements or make interest payments in a timely manner.
The supplemental indenture eliminated substantially all of the restrictive covenants, certain affirmative covenants, certain events of default and certain conditions to legal defeasance or covenant defeasance contained in the indenture governing the Notes.
They can take the form of affirmative covenants, in which a borrower agrees to keep promises such as producing sufficient cash flow to repay the debt, with an adequate cushion, and supplying financial information.
early-twentieth-century courts to enforce affirmative covenants running
More often, the parties will allocate environmental liabilities through a combination of price reductions, property carve-outs, affirmative covenants, indemnifications, escrows and insurance.
The proposed amendments eliminate from the Indenture substantially all of the restrictive covenants, certain affirmative covenants, certain events of default and certain conditions to legal defeasance or covenant defeasance.
The proposed amendments to the indenture governing the notes would eliminate substantially all of the restrictive covenants, certain affirmative covenants, certain events of default and certain conditions to legal defeasance or covenant defeasance contained in the indenture and the Notes.
Forward-looking statements include, among others, statements regarding the payment of the Total Consideration and Tender Offer Consideration, the elimination of restrictive covenants, certain affirmative covenants and certain conditions to legal defeasance or covenant defeasance contained in the indenture governing the Notes and the redemption of any untendered Notes, and are generally identified with words such as "believe," "could," "expect," "intend," "may," "plan," "will" and similar expressions.

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