Bond covenant

(redirected from Bond 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 ?
Bond covenants: Many of the financial ratios and even occupancy ratios may be monitored as a condition of required bond covenants, which are laid out by the bond trustee for CCRCs that are financed with long-term, publicly issued debt.
Since we don't have access to the data for bond covenants and contracts for financial managers, we cannot make a final conclusion on the true economic intuition behind our empirical results in this paper.
In the first two of the three-notch downgrade, Moody's emphasized the failure of the utilities enterprise to set rates sufficient to meet bond covenants, noting weak rate setting resulted in five rate covenant violations in the last five fiscal years.
As well as short-term debt, bond covenants play an import role in mitigating agency costs and also help reduce the negative relationship between leverage and growth opportunities.
Warner, On Financial Contracting: An Analysis of Bond Covenants, 7 J.
After AIG's bankruptcy in 2008, its asset management subsidiary was sold to Hong Kong billionaire Richard Li and renamed PineBridge, but the breach of bond covenants in 2010 has kick-started a long process of restructuring talks, which culminated in Morgan Stanley's hiring to advise on the sale of BTC.
Loan or bond covenants often require borrowers to agree to maintain a minimum level of equity capital or cash on hand.
The lowest rated items were: bond covenants (2.32), managing media relations (3.93), facility/plant management (4.14), components of marketing techniques (4.49), and utilization of a global business perspective (4.56).
BANKING AND CREDIT NEWS-18 February 2010-Moody's says HeidelbergCement's bond covenants with insufficient protection against risk(C)1994-2010 M2 COMMUNICATIONS http://www.m2.com
Evidence on the effect of bond covenants and management compensation contracts on the choice of accounting techniques; the case of the depreciation switch-back.
Hammerson, the country's fourth-largest property company, will raise pounds 580m and warned that without extra funding it was likely to breach the terms of its bank and bond covenants.
In exchange for relief from this requirement, Delta will increase its daily flight commitments from 187 (from the original agreement) to 400; will shorten the bond repayment period from 2022 to 2016; and will go beyond the original bond covenants and specific job functions that will stay in Minnesota as part of the commitment for 10,000 jobs.