protective covenant

(redirected from Bond covenant)
Also found in: Financial.

protective covenant

1. An agreement, in writing, which restricts the use of real property.
2. A restriction, which affects the use of real property, that appears in a legal document conveying title to the property.
References in periodicals archive ?
and Jerold Warner, 1979, On Financial Contracting: An Analysis of Bond Covenants, Journal of Financial Economics, 7:117-161.
In addition to offering finance-specific services like bond covenant studies and sale/merger transaction assistance, IRG offers interim and turnaround management, sustainable process improvement, new hospital development services and overall management advisory.
Stability in revenues is derived from tax bill assessments charged to over 258,000 residential units accounting for over half of the system's revenues and bond covenants requiring minimum rate increases for residential disposal costs and tipping fees if debt service coverage drops below 1.
Stability in the district's financial metrics and improvement in liquidity levels consistent with the bond covenant are key to maintenance of the rating.
The need to contribute this additional equity to the project led to erosion of the Quechan tribal government balance sheet, raising concern related to an increased potential for the occurrence of bond covenant violations.
They are particularly interested in a utility's adherence to bond covenant requirements and financial performance.
Violating the bond covenant is another entry in the roster of recent bad news for the only Arkansas hospital that had more than $1 billion in patient revenue each year between 2004 and 2007.
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.
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.
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