18 May, 2017

Understanding Covenants

By |2017-05-18T00:26:07+10:00May 18, 2017|Education|

Security covenants play a crucial role in investor protection and serve as a major contributor to credit analysis. While financial institutions such as banks and insurance companies are subject to regulatory requirements, a security’s covenant package is instrumental to downside protection when investing in non-financial corporate debt issuers. Covenants are legally enforceable conditions that borrowers (the issuer) and lenders (the investors) agree [...]