medium · Corporate Credit Analysis covenants
An incurrence covenant for 'Restricted Payments' typically allows dividends only if which condition is met?
- The borrower has passed its most recent quarterly maintenance leverage tests.
- The dividend is instead paid to the senior secured term lenders, not the equity holders.
- The borrower's consolidated EBITDA has grown for four consecutive fiscal quarters running now.
- The borrower has sufficient capacity in its 'builder basket' or 'available amount.'
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