2022/10/04 - Fairways Debt - Covenants

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

As a lender, the Covenants module in Fairways Debt allows you to collaborate with all the involved stakeholders, track your covenants deadlines and easily publish the related reports.

The module supports all covenant types: financial, non-financial and ESG covenants.

You can easily create and aggregate metrics based both on debt data (provided by Fairways Debt) and external asset data (cash, rents, occupancy rates etc.) on a single screen.

Configuring the Module

The configuration steps are mainly related to the setup of the relevant metrics.

To configure the module, you must then follow these steps:

  1. Create your metrics based on your debt data (i.e. computed from Fairways Debt data) or on your asset (i.e. imported manually). Please refer to Import a Metric Package to an Account for more details.
  2. Attach your entities and fill in the frequencies. Please refer to Associate a Metric with Entities for more details.
  3. Create your own scenarios to anticipate your covenant situation based on a simulated best or worst-case analysis of your data. Please refer to Create a Scenario for more details.

The module also provides you with some pre-packaged metrics based on the most used ones. You can refer to the related article to get more information on how to import them and use them.

Configuring your Covenants

Once you have settled all the metrics on your account and filled in frequencies at the entity level, you can then create your covenants. You can perform this action:

  • either via the transaction page: select Debt & Derivatives in the application menu > select a transaction> click the Covenants tab > click Add Covenant
  • or via the Entities tab: select Debt & Derivatives in the application menu > click the Entities tab > select your entity > click the Covenants tab > Click Add Covenant

Please refer to Create a Covenant for more details.

Covenants can be based on debt data or asset ones. To be fully computed, all inputs should be available on Fairways Debt. The Metrics page allows you to manage (i.e. fill in, update, anticipate…) easily the asset-based data. Please refer to Entity Metrics for more details.

Tracking your Covenants

On the Overview page, you can easily track your covenants as it allows you to get an overview from an aggregated level to a granular one and check your covenants status at any time.

This page allows you to:

  • Perform an aggregation by covenant, transaction or counterparty.  Please refer to Entity Overview for more details.
  • Export your scenarios. Please refer to Export an Entity Scenario for more details.

Fairways Debt also allows you to follow-up your metrics and covenants situation by setting up the related notifications. You will then receive a deadline or a status reminder. Please refer to Create an Event Notification for more details.

Generating your Covenant Publications

The module allows you to generate your bank publication.

You can create your own publishing templates. Please refer to Create a Covenant Publishing Template for more details.

Then you can generate the required publications for the bank commitments. Please refer to Generate a Covenant Document for more details.

You can track your publications deadlines (view the upcoming and the overdue ones) via the Publications page. Please refer to Entity Publications for more details.

An analysis can also be generated to view different scenarios applied to your covenants. Please refer to Covenant Analysis for more details.

Viewing your Covenant Forecasts

You can use the "Covenant Forecast" widget on your Fairways Debt dashboard to view your covenant forecasts. Please refer to Covenant Forecast for more details.

See the Covenants section for more details.

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