Bond covenant

Bond Covenant
Bond Covenant definition :
A contractual provision in a bond indenture. A positive covenant requires certainactions, and a negative covenantlimits certain actions.
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Bond covenant
A contractual provision in a bond indenture. A positive covenant requires certain actions, and a negative covenant limits certain actions. ...

bond covenant - Related Articles
Corporate Covenant and Other Embedded Options in Pension Funds
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BOND COVENANT - are agreements within a bond that can either be negative or positive in the view of the...
BOND CROWD - Members of the stock exchange who transact bond orders on the floor of the exchange.

A bond covenant that specifies certain actions the firm must take.
Bankruptcy risk
The risk that a firm will be unable to meet its debt obligations. Also referred to as default or insolvency risk.

A bond covenant that restricts in some way the firms ability to incur additional indebtedness.
Debt market
The market for trading debt instruments.

A bond covenant that requires the borrower to grant lenders a lien equivalent to any liens that may be granted in the future to any other currently unsecured lenders.
Negative working capital ...

A bond covenant that limits or prohibits certain actions unless the bondholders agree.
Negative duration
Occurs when the price of an MBS moves in the same direction as interest rates.

A bond covenant that limits or restricts any additional debt that may be incurred by the issuer. Debt limitations look to protect the current lenders by maintaining the firm's degree of leverage.

Debt limitation
A bond covenant that restricts the firm's ability to incur additional indebtedness in some way.
Debt market
The market for trading debt instruments.

A bond covenant preventing certain activities, unless agreed to by the bondholders.

[OTS] affirmative covenant A bond covenant that specifies certain actions the firm must take.

Limitation on asset dispositions A bond covenant that restricts in some way a firm's ability to sell major assets. Limitation on conversion Applies mainly to convertible securities. Possible delay in convertibility.

Affirmative covenant A bond covenant that specifies certain actions the firm must take. Affordability index An index that measures the financial ability of consumers to purchase a home.

Limit price Maximum price fluctuation Limitation on asset dispositions A bond covenant that restricts in some way a firm's ability to sell major assets.

Bond covenants exist to restrict these games that shareholders might play, but bond contracts cannot prevent all eventualities. An interesting development of the 1980s, however, was the 'poison put.

Limitation on subsidiary borrowing
A bond covenant that restricts in some way a firm's ability to borrow at the level of firm subsidiary.
Limited company
A form of business commonly used in the U.K. comparable to incorporation in the U.S.

Technical Default
Failure by the issuer to meet the requirements of a bond covenant. These defaults do not necessarily result in losses to the bond holder. The default may be cured by simple changes of policy or actions by the issuer.

Covenants Provisions in the legal agreements on loans, bonds, or lines of credit. Usually written by the lender to protect its position as a creditor of the borrowers. See Bond Covenants
CP See commercial paper ...

There are various kinds of bond covenants: an agreement to charge sufficient fees, common in municipal bonds, to produce the required revenue (a rate covenant); an agreement not to sell or encumber the project (a negative covenant); ...

See also: Expense, Banks, Funding, Values, Indenture