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LexisNexis Practical Guidance®
Straightforward guidance across a range of topics
- Lending
- Undertakings
Common financial covenants
This guidance note explains:
- • the most common financial covenants used in general corporate lending, namely:
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- ◦ minimum net worth or tangible net worth;
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- ◦ gearing ratio;
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- ◦ leverage ratio or debt to equity ratio;
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- ◦ cashflow cover ratio;
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- ◦ interest cover ratio; and
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- ◦ loan to value ratio;
- • a typical starting point for each of those financial covenants; and
- • some items which could be included or excluded from definitions within financial covenants.
See Common financial covenants.