The intent of covenants in debt agreements is to discourage lender fraud.

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The intent of covenants in debt agreements is to protect the interests of lenders by setting certain conditions that borrowers must meet, such as maintaining certain financial ratios, limitations on additional debt issuance, or restrictions on dividend payments or mergers and acquisitions. This helps to reduce the risk of default and ensures the lender's ability to recover their investment. It is not directly related to preventing lender fraud.

The Intent of Covenants in Debt Agreements Is to Discourage