medium · Private Credit & Debt documentation-covenants-terms

In a 'Maintenance' vs 'Incurrence' covenant comparison, which of the following is true of Incurrence covenants?

1. They are typical of mid-market bank-arranged senior facilities.
2. They provide a quarterly early warning signal for lenders.
3. They are only tested when the borrower takes a specific action like incurring new debt.
4. A breach occurs automatically if EBITDA falls below a certain threshold.

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