Overview

A covenant is a contractual restriction in a financial agreement placed on the borrower. One common class of covenants is financial covenants, which are based on information found in financial statements. Allowing financial institutions to enter formulas into Statement Analyzer to represent covenants gives them a convenient way to watch for covenants in default. You can apply a covenant to a historical period. Advisor contains a set of predefined covenant templates that you can use when creating a covenant. Each industry has a set of predefined covenant templates.

If you are a system administrator, you can view the predefined covenant templates associated with each industry, and create any custom covenant templates, by opening the Statement Defaults section in Setup and Administration and then selecting Covenant Templates. You cannot edit any of the predefined covenant templates, though you can add templates to a particular industry and edit the ones listed in the Financial Institution group.