A covenant statement is a spreadsheet that allows a client to create, view, edit or delete covenants for a client and to monitor covenant compliance. In order to create a covenant, the client must first have a historical statement. You can access the covenant statement from a client’s historical statement, from the Statement Covenants section on a business client page, or from the Recent flyout by right-clicking the client name and selecting Statement Spreads > Edit Covenants.

When a covenant is added to a covenant statement, a covenant line is added to the covenant statement for that covenant. The covenant line inherits its name from the covenant title. Each covenant line represents a different covenant. In addition, any additional data lines or statement lines used by the covenant’s formula are also added to the statement automatically.

You can delete a covenant from a spreadsheet. In fact you can delete all of the covenants from a covenant statement, but to be able to view the covenant statement, it must contain at least one covenant.

 

Cell Types

A covenant statement can contain these types of cells:

• A covenant cell is comprised of a covenant line and a period.

• An additional data line cell is comprised of an additional data line and a period.

• A statement line cell is comprised of a statement line and period.

Covenant Cells

All covenant cells are read-only. A covenant cell will have a calculated value (either numeric or yes/no) if the period is in the covenant date range. Otherwise, the cell will be empty. When you select a covenant cell, the following information appears at the top of the covenant statement:

• Covenant formula, which consists of the formula, operator, and value

  Note: If the period is outside of the date range, this message displays instead of the covenant formula: “Not Calculated. Period not within covenant's date range.”

• Date range

• Historical lines, if referenced in the covenant formula.

If a covenant cell is in compliance, the cell content displays in black. If a covenant cell is in default, then the cell content displays in red. If there is an error in calculating or evaluating a covenant, the covenant cell displays a set of five question marks. A covenant cell that has a covenant status of Waived displays in green.

Cell Memos

You can add a comment to a covenant cell by right-clicking the cell and selecting Cell Memo. This can be done when the covenant statement is in the edit status. If a covenant cell has a cell memo attached to it, the cell is highlighted in yellow.

The Cell Memo option is also the place where you would assign a covenant status for the covenant if it is in default. Refer to Covenants in Default for more information.

Including or Excluding Values

You can control whether a given calculated value displays on the covenant spreadsheet and reported on the covenant reports by right-clicking the cell and selecting either Exclude or Include. The values are displayed (included) by default. This feature is only available for a covenant cell if the period is with the covenant’s date range.

When you exclude a calculated value, it is removed from the cell and the cell is changed to gray. Including an excluded calculated value displays the value and the cell is changed back to the default color.

Additional Data Line Cells

Additional data line cells are editable. They can be either numeric or yes/no, depending on the format type of the additional data line. For numeric additional data line cells, you can enter values with decimals.

You can automatically copy the value of an additional data line cell into all of the visible cells to the right of that cell by right-clicking on the cell and selecting Extend. This functionality is identical to the extend functionality that is available on the historical statement page.

Statement Line Cells

Statement line cells are read-only for statement periods and editable for covenant periods. They are numerical only. Like additional data line cells, they are extendable but only for the covenant periods to the right of the selected statement line cell.

Historical and Covenant Periods

A covenant statement is made up of all of the historical periods for a client statement (initially) and any covenant periods that you add. A covenant statement can contain up to six periods at a time. A historical period has an H in its header, whereas a covenant period has a V. You can remove both historical and covenant periods from the covenant statement, but the statement must contain at least one period.

This table describes the options that are available when you right-click on a period header.

Option	Available for This Period Type	Description
Edit Period Information	Covenant	Opens the Edit Period Information dialog box. You can make any changes except changing the period type.
View Period Information	Historical, covenant	Opens the View Period Information dialog box. You cannot make any changes to the period information.
Add New Period	Historical, covenant	Open the Add Covenant Period dialog box.
Remove Period	Historical, covenant	Removes the period from the covenant statement, but does not delete the period information.
Delete Period	Covenant	Deletes the period from the covenant statement.

 

You can also perform some of these actions (add, remove, and delete [covenant] periods) by clicking the Select Periods option at the top of a covenant statement. Refer to Managing the Periods in a Covenant for more information.

Calculation and Balancing

If you make a change to an additional data line or a covenant period, Need Calc displays in red for all displayed periods. To refresh the covenant calculations, click the Calculate option at the top of the covenant statement.

If a period from a historical statement is out of balance, then Need Balance displays in red in the period header. Though you cannot actually balance an unbalanced historical statement with the Balance and Calculate option, it will allow to you to balance a historical statement that is actually balanced but not confirmed as balanced.

For example, a user has balanced the historical statement, but had not clicked the Balance option before exiting the historical statement. In this situation, clicking Balance and Calculate will confirm that the historical statement is in balance and will refresh the covenant calculations. If Need Balance is still displayed, then you need to access the historical statement and bring the statement into balance.

Covenant Statuses

When a covenant is in default, you can select a covenant status for the covenant. The status will help to describe the defaulted condition of the covenant. The Status field is accessible by right-clicking on the covenant cell that is in default and selecting Cell Memo. Refer to Cell Memos for more information.

These covenant statuses are provided by default and cannot be changed:

• Waived: Though the covenant is in default, no further investigation is needed. A covenant cell that has a covenant status of Waived displays in green.

  Note: When a covenant is given the Waived status, it will appear in green on covenant statement.

• Officer follow-up: An officer with your financial institution will contact the borrower to discuss the default situation.

• No Status: No action has been taken yet on the covenant.

Covenant Reports

You can run the Covenant report from either the covenant statement screen (by clicking the Run Report link) for a client or from the Action menu on the Statement Covenants section on a business client page.