Contractual provision in a credit agreement constraining the borrower or requiring specified financial metrics. Two main types: (i) maintenance covenants — tested quarterly (e.g., Total Leverage Ratio ≤ 6.0x, Interest Coverage ≥ 2.0x); breach triggers default, requiring waiver/amendment or equity cure; (ii) incurrence covenants — tested only when the borrower takes a specific action (issuing new debt, paying a restricted dividend, etc.). Investment-grade and 'cov-lite' Term Loan B facilities typically use incurrence-only; middle-market and direct-lender deals retain maintenance covenants.