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 ?
A loan covenant is an agreement or stipulation laid down in loan contracts, particularly contracts with enterprises, under which the borrower pledges either to take certain action (an affirmative covenant), or to refrain from taking certain action (a negative covenant); this is consequently part of the terms and conditions of the loan.
Tower Development, a party to the 2009 Agreement, the 2009 Agreement is an affirmative covenant that does not run with the land.
The onus on an owner of land subject to an affirmative covenant to maintain can be weighty.
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, ViaSat said.
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.
affirmative covenants running with the land, (51) and in subsequent
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 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.
The proposed amendments eliminate substantially all of the restrictive covenants, certain affirmative covenants, certain events of default, certain conditions to legal defeasance or covenant defeasance and substantially all of the restrictions on the ability of Cricket or Leap to merge, consolidate or sell all or substantially all of their properties or assets contained in the indenture and the Notes.
The Indenture has been amended to eliminate substantially all of the restrictive covenants, several affirmative covenants (including certain reporting obligations) and events of default contained in the Indenture and to modify the covenant regarding mergers, consolidations and transfers of the Company's properties and assets substantially as an entirety.

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