Covenant
Debt Covenant
Credit & DebtA condition attached to a loan or bond that the borrower must maintain, such as a maximum leverage ratio or minimum coverage ratio. Breaching one can trigger penalties or immediate repayment.
Why it matters
Covenants are the early-warning tripwires of credit. Reading them tells you how much room a stressed borrower actually has before lenders take control.
Indian example
Related terms
Learn the concept
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