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A loan covenant is a condition in a commercial loan or bond ... Covenants can potentially have negative consequences as well. ... affirmative, negative or positive ...
The covenant may be negative or affirmative. A negative covenant is one in which property owners are unable to perform a specific activity, such as block a scenic view. An affirmative covenant is one in which property owners must actively perform a specific activity, such as keeping the lawn tidy or paying homeowner's association dues for the ...
In Australia, negative pledge lending took off after a substantial deal by Pioneer Concrete in 1978. [1] It was a new way of lending, which allowed the banks to lend to corporations, something previously the domain of life insurers. Negative pledge clauses are almost universal in modern unsecured commercial loan documents.
Negative covenants may be continuous or incurrence-based. Violations of negative covenants are rare compared to violations of affirmative covenants. With most debt (including corporate debt, mortgages and bank loans) a covenant is included in the debt contract which states that the total amount owed becomes immediately payable on the first ...
4 tips for investing in zero-coupon bonds. Consider your financial goals. The biggest thing to remember about zero-coupon bonds is that they’re intended to be long-term investments that don’t ...
Bonds are a longer investment, with 20- or 30-year options currently on offer. A Treasury note or bond is a loan you make to the U.S. government, and in exchange, it pays you substantial interest ...
Within this time frame, there are short-term bonds (1-3 years), medium-term bonds (4-10 years) and long-term bonds (10 years or more). At the end of this term, known as the maturity date, the full ...
Cov-lite (or "covenant light") is financial jargon for loan agreements that do not contain the usual protective covenants for the benefit of the lending party. Although traditionally banks have insisted on a wide range of covenants that allow them to intervene if the financial position of the borrower or the value of underlying assets deteriorates, around 2006 the increasing strength of ...