TERMinology

Our glossary of private capital terms

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Covenant

Contractual obligation between a borrower and its financing providers. Covenants represent a list of actions which the borrower is allowed and is not allowed to do during the life of the debt facility.

The level of restrictiveness of covenants varies widely across different facilities (loans and bonds).

See also Financial Covenant, Incurrence Covenant, Affirmative Covenant, Negative Covenant.