Fixed Income
Affirmative Covenant
Definition
What is Affirmative Covenant?
A covenantA contractual promise or restriction designed to protect lenders or govern borrower behaviour. requiring the borrower to take specified actions.
Example in practice
How This Looks in Practice
The issuer must maintain insurance and provide audited statements.
Keep learning
Related Terms
Fixed Income
Bond
A debt security through which an investor lends money to an issuer in return for promised payments.
Fixed IncomeIssuer
The government, company, or organisation that creates and sells a security.
Fixed IncomeFace Value
The principal amount stated on a bond and usually repaid at maturity.
Money MarketsTreasury Bill
A short-term government debt instrument usually issued at a discount and repaid at face value.