Such studies are intended to achieve fair and equitable water and wastewater rate structures that will assure adequate revenues for operation and maintenance of water and wastewater treatment distribution and collection systems, debt service, capital improvements and
bond covenant requirements.
It should be emphasized that if rational bond investors know in advance that their money lent to a firm will be "stolen" in part by financial managers, they will certainly put some conditions, terms or constraints in the
bond covenant or in the contract for financial managers to prevent this wealth-transfer from happening.
1 October 2014 - US private equity fund Leeds Equity Partners LLC has completed an equity investment in local corporate
bond covenant research firm Covenant Review LLC, the fund announced without revealing details regarding the transaction.
The revised outlook is based on Fitch's projection that higher debt and revenues/margin pressure will result in a spike in Fitch-adjusted group leverage to about 5x gross debt/EBITDAR in 2011, which would make the company exceed the 4:1 leverage
bond covenant as early as June 2011, thus putting some restriction on its capacity to incur more debt, the agency explained.
"Moody's believes the resolution of the REIT's [real estate investment trust's] nonperforming assets will be a protracted process, and as a result, EBITDA [earnings before interest, taxes, depreciation and amortization] will erode and fixed charges could deteriorate to levels close to its
bond covenant threshold."
A recent joint publication, issued by the National Association of Bond Lawyers and the Government Finance Officers Association, offers a suggested post-issuance compliance check list to adhere to minimum IRS and related
bond covenant requirements at www.nabl.org.
In its reply to the attorney of the unnamed hedge funds, Tribune said, the company argued that the a part of the
bond covenant allows it to dispose of operations as it sees fit.
Mayers and Smith (1987), Schnabel and Roumi (1989), and Garven and MacMinn (1993) propose that to mitigate the underinvestment problem, a
bond covenant should be imposed, specifying that sufficient property insurance is purchased to make the bonds riskless and to prevent the shareholders from taking advantage of the limited liability provision by underinvesting in the states with large property losses.
Also, all debt obligations must be reviewed carefully to ensure that there will not be any conflicts with
bond covenants. For example, a government might find that due to the increased expense of the other post-employment benefits obligations, it must raise fees to ensure that it meets the requirements of a
bond covenant.
* Sagging occupancy, less than efficient operations, unacceptable profit margins
bond covenant violations
1207, 1271-73 (1991) (favoring rules against bondholder coercion); Marcel Kahan & Bruce Tuckman, Do Bondholders Lose from Junk
Bond Covenant Changes?, 66 J.
No information was provided about
bond covenant requirements since it was assumed that all bonds of this type have similar boilerplate covenants and indenture clauses.
