Bond Covenant
/ˈbɑnd ˈkʌvənənt/
Definitions
- (n.) A clause or set of clauses in a bond agreement that impose obligations or restrictions on the bond issuer to protect bondholders' interests.
The bond covenant prohibited the issuer from incurring additional debt beyond a specified limit.
Forms
- bond covenant
- bond covenants
Related terms
See also
Commentary
Bond covenants are crucial for risk management in bond issuance and often specify financial ratios, restrictions on further indebtedness, or asset maintenance.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.