easy · Corporate Credit Analysis

An incurrence covenant for 'Restricted Payments' typically allows dividends only if which condition is met?

1. The borrower has passed its most recent quarterly maintenance leverage test.
2. The dividend is paid to the lenders instead of the equity holders.
3. The borrower's EBITDA has grown for four consecutive quarters.
4. The borrower has sufficient capacity in its 'builder basket' or 'available amount.'

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