easy · Corporate Credit Analysis covenants
In the context of 'Permitted Liens,' what is the significance of 'Liens existing on the date of the Indenture'?
- They are automatically subordinated to the new debt by the terms of the negative pledge.
- They must be immediately discharged using the proceeds of the new bond issue.
- They are grandfathered in, allowing the company to maintain its current capital structure without violating the new covenant.
- They can be increased in size by up to 50% without requiring additional permission.
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