Bond covenant

Bond covenants are agreements within a bond that can be negative or positive from the point of view of the bondholder, for example, a negative bond covenant is a bond covenant that prohibits certain activities unless approved by the bondholders.

Bond covenants are clauses in the bond agreement that protect bondholders by restricting or requiring certain actions by the issuer (e.g., limits on additional debt, maintaining ratios).

- Used to explain the concept in accounting and business contexts.
- Used when training staff or documenting procedures and policies.

- Example: Teams reference **Bond covenant** when defining terms in manuals, policies, or training materials.

- Why it matters: Improves clarity and consistency across documentation and decision-making.