What is springing covenant?

Also referred to as a springing financial covenant. A covenant in a facility agreement that becomes effective if a certain event occurs. The trigger event for the covenant becoming effective is, typically, the borrower utilising the revolving facility or outstandings under that facility exceeding a specified amount.

What are incurrence covenants?

Incurrence Covenant means a covenant by any Obligor to comply with one or more financial covenants only upon the occurrence of certain actions of such Obligor, including a debt issuance, dividend payment, share purchase, merger, acquisition or divestiture.

What is an affirmative covenant?

An affirmative covenant is a type of promise or contract that requires a party adhere to certain terms. For example, an affirmative bond covenant could provide that an issuer maintain adequate levels of insurance or deliver audited financial statements.

What is financial covenants in loan agreements?

Financial covenants are promises or agreements entered into by a borrowing party that are financial in nature. Covenants are promises or agreements entered into by a borrowing party to comply with the terms agreed upon in relation to a loan agreement.

What is the correct meaning of the word covenant in Urdu?

There are always several meanings of each word in Urdu, the correct meaning of Covenant in Urdu is معاہدہ, and in roman we write it Moahida. The other meanings are Moahida and Ehad O Paiman. Covenant is an noun according to parts of speech.

Which is the best definition of a springing Covenant?

Springing covenant. Long term funding. A covenant in a loan agreement which becomes effective on the occurrence of a certain event in the future.

Are there any springing covenants in European leveraged loans?

Evolution of the springing covenant At least half of all European leveraged loan deals in 2017 were reported to be on covenant-lite terms, meaning that they do not benefit from maintenance financial covenants. This is only true for the term loans, however.

Can a term loan waive a springing Covenant?

Yes, the RCF lenders can waive any covenant breach on their own, but history has shown that RCF providers do not have unlimited patience, and in some cases have used a breach of the springing covenant as a leverage point to sell the RCF to the term loan lenders (who usually have more skin in the game).