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CFA Level 1 Question of the Week - Fixed Income
Which of the following conditions is/are affirmative covenants?
I. The principal of $500 million will be repaid at a 5% interest.
II. The debt-to-equity ratio of the borrowing company should not fall below 2.5.
III. The borrower is not allowed to distribute profits of the company as dividend as long as the loan is not repaid.
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CFA Level 1 Question of the Week - Fixed Income 7 votes
A. All three conditions are affirmative covenants.
B. Only I is an affirmative covenant.
C. Only I and II are affirmative covenants.