medium · Private Credit documentation-covenants-terms
A loan agreement specifies that the borrower's Total Leverage Ratio must be less than 5.50× only if the company elects to pay a discretionary dividend to its parent company. In all other cases, the ratio is not measured.
How should this covenant be classified?
- Incurrence Covenant
- Maintenance Covenant
- Springing Covenant
- Affirmative Covenant
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