A debt covenant report is a financial document covering the performance of your company in relation to the targets specified by the lender as part of the debt agreement.
A debt covenant specifies the operational and financial targets that your company has to meet for a specified time period. It may also restrict or prohibit the business activities that may impact your company’s performance. A debt covenant report benchmarks the performance of your company against defined targets.
Your company’s management is required to provide a compliance certificate to the lenders, indicating that the targets for a particular tenure were met. A failure to meet such covenants may lead to penalties or even call for a full payment.
A debt covenant report typically measures your company’s performance on the following parameters:
A debt covenant report enables your company to:
A debt covenant report is important for an event tomorrow, as it helps: