debt covenants

debt covenants definition - finance
Restrictions that are put on a borrower by the bank or other entity that granted the loan. The restrictions might specify that a certain level of sales or profits be generated or might limit the companyÂ’s ability to take on other debt. If debt covenants are broken, often the loan becomes due immediately.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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