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Private Debt
~60s
Covenant Structures
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Debt
Covenants
Which statement best distinguishes a
maintenance covenant
from an
incurrence covenant
?
A
Maintenance is tested periodically; incurrence is tested only upon certain actions
B
Maintenance is a legal covenant; incurrence is an accounting covenant
C
Maintenance is only tested at closing; incurrence is tested monthly
D
Maintenance applies only to revolvers; incurrence applies only to term loans
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