Which of the following is an example of an affirmative covenant?
A) The issuer will not issue debt senior to the existing debt.
B) The issuer will maintain an interest coverage ratio above 3 times.
C) The issuer will not pay dividends to common shareholders if interest on the debt is not paid.

Question

Quizplus · Accepted Answer

An affirmative covenant, like maintaining an interest coverage ratio above 3 times, requires the issuer to perform specific actions, such as maintaining certain financial ratios, to ensure the issuer's financial stability and ability to meet debt obligations.

Which of the Following Is an Example of an Affirmative