Intro to Finance
Debt covenants are agreements or clauses included in loan contracts that impose certain restrictions or requirements on the borrower to protect the lender's interests. These covenants can include financial ratios that must be maintained, limitations on additional borrowing, and operational constraints. By ensuring that borrowers maintain specific financial health indicators, lenders can minimize their risk of default.
congrats on reading the definition of Debt Covenants. now let's actually learn it.