Information about Loan Covenant
A loan covenant is a condition in a commercial loan or bond issue that requires the borrower to fulfill certain conditions or forbids the borrower from undertaking certain actions, or possibly restricts certain activities to circumstances when other conditions are met.
Typically, violation of a covenant may result in a default on the loan being declared, penalties being applied, or the loan being called.
Covenants may also be waived, either temporarily or permanently, usually at the sole discretion of the lender.
Typically, violation of a covenant may result in a default on the loan being declared, penalties being applied, or the loan being called.
Covenants may also be waived, either temporarily or permanently, usually at the sole discretion of the lender.
A loan is a type of debt. All material things can be lent but this article focuses exclusively on monetary loans. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the and the .
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bond is a debt security, in which the authorized issuer owes the holders a debt and is obliged to repay the principal and interest (the coupon) at a later date, termed maturity.
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