Create a Covenant

Covenants in Fairways Debt are agreements specifying actions and thresholds that the borrower must perform and respect. Covenants protect lenders when borrowers do not meet their requirements.

Note: You can create a covenant for:

  • Loans:
      • Standard loans
      • Subsidy loans
      • Ongoing loans
      • Construction loans
      • Manual loans
      • PIK loans
      • CDC loans
  • Securities
  • Facilities:
      • Credit facilities
      • Facility agreements

 

Prerequisites
  1. Create a Metric in the Account or Import a Metric Package to an Account
  2. Associate a Metric with Entities
  3. Configure an Entity Scenario

 

Navigate to the Debt & Derivatives Application
  1. Log in to your Fairways Debt account, e.g. https://login.financeactive.com/eu, and select a customer account, if relevant.
  2. Navigate to Applications Applications.png > Debt & Derivatives, and navigate to the relevant portfolio.

In this example, we log in to the Main City account.

MainCity_EN.png

 

Navigate to the Covenant Creation Form...
... via the Transaction Profile
  1. Click the relevant transaction to open its profile.

Portfolio_EN.png

  1. Navigate to Covenants.
  2. Click Add Covenant.

Covenants_EN.png

 

... via the Entities Page
  1. Click Entities.

Portfolio_EN.png

  1. Click the relevant entity to open its page.

Entities_EN.png

  1. Navigate to Covenants.
  2. Click Add Covenant.

Entity_Covenants_EN.png

 

Create a Covenant
  1. Complete the form with all relevant details.

Note: Fields marked with an asterisk * are mandatory.

Field

Description

Transaction Associated

Transaction to associate with the covenant.

Notes: When creating a covenant via a transaction profile, that transaction is already selected.

Metric Associated

Metric to associate with the covenant.

AssociateCovenant_EN.png

Field

Description

Start Date

Start date of the covenant.

Expected

Ideal threshold required for the covenant to be compliant.

Warning

Notes:

  • This field only displays for the amount, multiplier, number, and percentage metric types.
  • The warning operator inherits from the expected operator.

Threshold to respect for the covenant to remain compliant, but not ideal, hence the warning.

ThresholdPeriods_EN.png

Field

Description

First Publication Date

Start date of the publications.

Frequency

Frequency of the publications: when borrowers should update lenders.

Note: Available frequencies are:

  • Monthly
  • Quarterly
  • Annually

Notification Reminder

Frequency of the publication notification, if different from the default notice period.

Publication_EN.png

  1. Click Apply.

Covenant_Create_EN.png

The new covenant displays in the transaction profile...

Covenant_Created_EN.png

... and in the entity scenario, if relevant.

Note: Only covenants associated with actual transactions display in the entity scenario.

Library_EN.png

 

Threshold Period Operators

Operator

Description

<

Note: This operator only displays for the amount, multiplier, number, and percentage metric types.

The value must be lower than the entered threshold, e.g. lower than 1000.

<=

Note: This operator only displays for the amount, multiplier, number, and percentage metric types.

The value must be lower than or equal to the entered threshold, e.g. lower than or equal to 1000.

=

The value must match the entered threshold, e.g. equal to 1000.

>

Note: This operator only displays for the amount, multiplier, number, and percentage metric types.

The value must be greater than the entered threshold, e.g. greater than 1000.

>=

Note: This operator only displays for the amount, multiplier, number, and percentage metric types.

The value must be greater than or equal to the entered threshold, e.g. greater than or equal to 1000.

 

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