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:
-
- Cash facilities
- Credit facilities
- Facility agreements
-
Prerequisites
Navigate to the Debt & Derivatives Application
- Log in to your Fairways Debt account and select a customer account, if relevant.
- Navigate to Applications
> Debt & Derivatives, and navigate to the relevant portfolio.
In this example, we log in to the Main City account.
Navigate to the Covenant Creation Form...
... via the Transaction Profile
- Click the relevant transaction to open its profile.
- Navigate to Covenants.
- Click Add Covenant.
... via the Entities Page
- Click Entities.
- Click the relevant entity to open its page.
- Navigate to Covenants.
- Click Add Covenant.
Create a Covenant
- Complete the form with all relevant details.
Note: Fields marked with an asterisk * are mandatory.
|
Field |
Description |
|---|---|
|
Releated Transaction |
Transaction to associate with the covenant. Notes: When creating a covenant via a transaction profile, that transaction is already selected. |
|
Related Metric |
Metric to associate with the covenant. |
|
Field |
Description |
|---|---|
|
Start Date |
Start date of the covenant's threshold. |
|
Expected |
Threshold required for the covenant to be compliant. |
|
Warning |
Note: This field only displays for the amount, multiplier, number, and percentage metric types. Threshold to respect for the covenant to remain compliant, but not ideal, hence the warning. |
Tip: The frieze updates along with the thresholds entered. The frieze does not apply to text metric types.
|
Field |
Description |
|---|---|
|
Verbiage |
Contractual verbiage related to the covenant. |
|
Field |
Description |
|---|---|
|
Add Publication |
Configuration of calendar events, if relevant. |
|
First Publication Date |
Start date of the publications. |
|
Frequency of the publications: when borrowers should update lenders. Note: Available frequencies are:
|
|
|
Reminder |
Frequency of the publication notification, if different from the default notice period. |
- Click Apply.
The new covenant displays in the transaction profile...
... and in the entity scenario, if relevant.
Note: Only covenants associated with actual transactions display in the entity scenario.
Notes:
- The overview does not display all the periods for the covenants defined on a monthly or a quarterly frequency. All the periods can be viewed on the generated Excel file.
- A period for a covenant is grayed out in the overview as long as the threshold's start date has not been reached.
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. |