covenant-lite
USA
A type of loan facility which has less financial covenant restrictions than is ordinarily required. Covenant-lite loan facilities take various forms but may be broadly characterized as senior syndicated leveraged loan facilities with the following features:
• A negative covenant package similar to (or based on) those used in high-yield bonds which are usually given on an "incurrence" rather than "maintenance" basis. The effect is to loosen the lender's control since incurrence tests must be met only at the time of a specific event (such as the incurrence of debt) rather than the traditional maintenance test which must be met at all times.
• No financial covenants; or financial covenants (usually the leverage ratio) that apply to the revolving loans only (and not the term loans).
Covenant-lite loans have lost favor with lenders since the credit crisis of July 2007 and are no longer generally available

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

Look at other dictionaries:

  • Covenant-Lite Loans — A type of loan whereby financing is given with limited restrictions on the debt service capabilities of the borrower. The issuance of covenant lite loans means that debt is being issued, both personally and commercially, to borrowers with less… …   Investment dictionary

  • Cov-lite — ( covenant light ) is financial jargon for loan agreements which 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 which allow them to… …   Wikipedia

  • maintenance test — USA A financial ratio test for covenant compliance that needs to be met at regular intervals (such as quarterly or the end of each fiscal quarter). For example, the borrower may be required to maintain a leverage ratio of less than 3.0:1.0. The… …   Law dictionary

  • Marriage — For other uses, see Marriage (disambiguation). Married and Matrimony redirect here. For other uses, see Married (disambiguation) and Matrimony (disambiguation) …   Wikipedia

  • M'era Luna — Festival Flugplatz Hildesheim M’era Luna 2005 Ort Hildesheim Flugplatz Genre Elektro, Future Pop, Synth Rock …   Deutsch Wikipedia

  • M'era Luna Festival — Flugplatz Hildesheim M’era Luna 2005 Ort Hildesheim Flugplatz Genre Elektro, Future Pop, Synth Rock …   Deutsch Wikipedia

  • Mera Luna — M era Luna Festival Flugplatz Hildesheim M’era Luna 2005 Ort Hildesheim Flugplatz Genre Elektro, Future Pop, Synth Rock …   Deutsch Wikipedia

  • Charlottesville, Virginia — Charlottesville redirects here. For the small town in Indiana, see Charlottesville, Indiana. Charlottesville, Virginia   Independent City   …   Wikipedia

  • M'era Luna Festival — Perttu Kivilaakso of Apocalyptica, M era Luna 2003 …   Wikipedia

  • Vendyl Jones — (born May 29, 1930 in Sudan, Texas) is an American Noahide scholar who has directed archaeological searches for Biblical artifacts such as the Ark of the Covenant.BiographyVendyl received his Bachelor s degree in Divinity, and a Master s degree… …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.