Overview

This page  helps you understand how to create a covenant. As part of this, you need to select the required covenant template and input the details including accountable person, target date, offset, mapping condition, threshold percentage, and ratio name. Once done, the covenant will be created.

The below step-by-step instructions describe the process. 

What is a Covenant?

A covenant is a legally binding agreements between two or more parties about how each party is to perform. In the financial sector, the covenants are expressed as financial ratios.

Creating a Covenant

1. On the Side Panel of Finvisage application, click Covenants, and then click General Covenants from the drop-down menu.

The General Covenants page is displayed. 

2. On the General Covenants page, click the Menu button, and then click the Add button. See the image below.

The Covenant screen is displayed.

3. On the Covenant screen:

 A. in the General Information section, select the Covenant Template, specify the Accountable Person and the Third Party. 

 B. In the Target Schedule section, enter the target date of the covenant and offset value.

c. In the Frequency field, specify the frequency by choosing from Monthly, Yearly, or Custom Schedule. 

D. In the End Date field, enter the end date of the covenant.

C. In the Map to Ratio section:

a. From the Mapping Conditions drop-down menu, select Automatic or Manual.

b. From the Entity drop-down menu, select the required entity.

c. From the Ratio Name drop-down menu, select the required ratio.

    For example, Debt Equity Ratio.

d. In the Threshold Percent field, specify the threshold percentage.

D. In the Additional Information box, enter the additional information, if any. 

E. Click the Create button.

The covenant is created.