Security & Collateral · glossary
A financial covenant comparing profit (EBITDA) with the interest paid on the loan. The Facility Agreement requires profit of at least four times the interest. In 2027 EBITDA of £3,600,000 against interest of £1,200,000 gave three times, and that was the breach. Chapter 8 · see Financial covenants
Explained in Chapter 8, The Breach, the Waiver and the Blocked Account, of Security & Collateral.
The main page for this term is Interest cover, in Finance Deals & Syndicated Lending.
The Facility Agreement sets two covenants, and the one that broke is interest cover. It compares profit with the interest paid on the loan. Profit must be at least four times the interest, measured each quarter over the twelve months just ended. The other covenant, leverage (debt measured against a year's profit), was met throughout.Read Chapter 8, The Breach, the Waiver and the Blocked Account →
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