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 are fairly liberal, with a sum sufficient rate covenant, no debt service reserve fund, and no historical or projected debt service coverage test for the issuance of additional bonds.
Request for Qualifications: Financial Advisor who will make recommendations, evaluate bond covenants, assist in the preparation of reports and analyses, participate in discussions with rating agencies, market and distribute bonds, purchase bonds, and provide the Building Authority and its Legal Counsel with debt service schedules and other financial schedules as requested.
SMB) reported that its bondholders have approved its proposal to align the beer company's bond covenants and, consequently, allow it to pursue a multi-beverage strategy.
Loan or bond covenants often require borrowers to agree to maintain a minimum level of equity capital or cash on hand.
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.
Evidence on the effect of bond covenants and management compensation contracts on the choice of accounting techniques; the case of the depreciation switch-back.
Hospitals try to make the bond covenants achievable because if they fail "it endangers the whole financing," Rock said.
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.
It is shown that these moral hazard problems can be mitigated by incorporating appropriate insurance requirements into bond covenants.
Also, all debt obligations must be reviewed carefully to ensure that there will not be any conflicts with bond covenants.
Spurned equity investors are likely to examine bond covenants more now than at any other time in recent decades.