covenant

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Covenant

An agreed action to be undertaken (Positive) or not done (Negative). A breach of a covenant is a default.

Covenant

A provision in an indenture. An indenture sets the terms of a bond; its terms include the coupon rate, the period until maturity, and whether the bond comes with any special features like convertibility or whether it is callable. A covenant within an indenture states what actions the issuer and the bondholder may or may not take in certain situations. Covenants (and indentures generally) exist to reduce the risk to all parties to a bond.

covenant

A clause in a loan agreement written to protect the lender's claim by keeping the borrower's financial position approximately the same as it was at the time the loan agreement was made. Essentially, covenants spell out what the borrower may do and must do in order to satisfy the terms of the loan. For example, the borrower may be prohibited from issuing more debt by using certain assets as collateral. Likewise, the borrower may be required to issue reports to bondholders on certain dates. Also called protective covenant, restrictive covenant. See also negative covenant, positive covenant.
Case Study In February 2002 Qwest Communications issued a warning that the company was in danger of violating a bank loan covenant by the end of June. A major slump in the telecom business combined with heavy indebtedness caused concern that the firm's debt would exceed the specified maximum of 3.75 earnings before interest, taxes, depreciation, and amortization. A month later the company announced that in return for agreeing to use $608 million from a $1.5 billion bond issue to reduce bank debt, the bankers agreed to a concession that raised the covenant maximum to 4.25 until the end of September, and 4.00 during the following six months. The covenant had been included as part of the original bank loan agreement in order to help insure that Qwest could continue to meet its existing obligations before taking on additional debt.

covenant

a written agreement by a person to pay a given sum of money to some other person or organization for a specified period of time. Where a covenant arrangement allows a donor relief from income tax on any sums paid over, the covenant provides a tax-efficient means of making financial provision for a relative or charity.

covenant

a specific condition in a legal agreement or CONTRACT. For instance, a formal agreement between a COMMERCIAL BANK and a JOINT-STOCK COMPANY to which it is loaning money might contain a covenant stipulating a limit on dividend distributions from profits.

covenant

An agreement. For example,one can make a “covenant not to compete”a provision of a business sale,or one can write a restrictive covenant regarding the use of real property into the real estate records,which binds all owners whether it is contained in their specific deed or not.

References in periodicals archive ?
When discussing the phenomenon of prophecy and the prophets attempt to heal the rift caused by the people s or ruler s deviation from the covenantal paradigm, we must take into account the differences of the prophet's role in the northern kingdom of Israel as opposed to the Davidic monarchy in Jerusalem.
7) of their covenantal relationship with society and that they affirm their responsibility to promote that trust through their respect for each client's personhood, culture, and story.
While New England became more English over the course of the seventeenth century, it also became more inclusive through the creation of covenantal confessions according to Weir.
In Christ Alone Exalted, Tobias Crisp propounded a very different covenantal agenda.
We have so far to go, yet our covenantal God brings health, wholeness, and fullness of life.
Covenantal politics are supposed to be based on high-minded principles and a deep sense of communal responsibility.
When the people of Israel show passion and concern only for our own well being, we diminish our covenantal role.
For a time, times and a half a time, and at the time of the termination of thrusting the hand (i.e., of the covenantal rejection) of the holy people all these things will come to an end.
Whether such a fusion actually offers a pathway to a modern federalism and a decentralized communitarianism, as Elazar claims, is another matter, for it must be said in frankness that while he was willing to suspend judgment about the federalist future of the United States, he was unshakable in his commitment to the covenantal past as the source of Western civilization.
Here, he first fully presented his theory of the covenantal foundations of modern federalism.
The author of this book, whose specialty is Christian business ethics, seeks to explain how the employment relationship between management and labor might be or become one of "covenantal" love and justice in the biblical sense of the word as understood in his own Lutheran theological tradition.
The ethnic and covenantal dimension of the law is often discussed in a way that would please most advocates of the `new perspective'.