positive covenant

Positive covenant (of a bond)

A bond covenant that specifies certain actions the firm must take. Also called an affirmative covenant.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

positive covenant

A clause in a loan agreement that requires a specified action by the borrower. For example, a positive covenant may mandate that the borrower maintain a specific level of working capital or issue periodic reports to creditors. Compare negative covenant.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
Typical legal indemnity policies | Right to light | Freehold restrictive or positive covenant | Mines & minerals | Land subject to rights of way / reservation rights | Adverse possession | Insolvency act indemnity | Breach of planning / building regulations / listed buildings consent | Search indemnity | Judicial review | Land registered with possessory title/good leasehold title | Lack of access or easement for services | Village green registration | Chancel repair | Absent landlord | Breach of leasehold covenant
An example of a so-called positive covenant might be an obligation to maintain the boundaries.
English law has certainly always been chary about allowing the transmission of the burden of a positive covenant to an assignee, preferring to adopt an analysis which upholds privity of contract between the original covenanting parties.
The English courts have adopted a mechanism for the onward transmission of positive covenants whereby a purchaser enters into a free-standing covenant that it will, in turn, in any sale, require an onward purchaser to bind itself to the same positive covenants, thereby retaining a relationship of contractual privity from purchaser to purchaser.
'There is a positive covenant to operate greyhound racing at the venue so I would also ask all interested parties to write expressing their wishes that it should continue.
Positive covenants are permitted as well as negative (restrictive) covenants.
There are always concerns that successive occupiers of premises may not be covered by negative and more likely, positive covenants on the land, such as obligations to make payments.
Moreover the lease may contain obligations known as positive covenants requiring the leaseholder to spend money on general maintenance, repairs etc.