Financial Education

Covenants

Debt contract clauses restricting borrower actions

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Fundamental

Covenants

Debt contract clauses restricting borrower actions

Definition

Covenants are contractual clauses in debt agreements that restrict borrower behavior to protect lender interests. Common covenants include debt-to-equity limits, minimum liquidity requirements, and restrictions on additional borrowing or dividend payments.

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#debt agreements #lender protection #restrictions #financial covenants

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Category: Fundamental

Fundamental analysis examines a company's financial health, management quality, and market position to determine intrinsic value.

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