If a bond covenant is not met, then the bond goes into technical default and the bondholder can demand immediate repayment or force the company to renegotiate the terms of the bond.

Question

Quizplus · Accepted Answer

This is correct. A bond covenant is a promise or agreement made by a company in exchange for issuing bonds. If the covenant is not met, it can trigger a technical default and give bondholders the right to demand immediate repayment or renegotiation of the bond's terms.

If a Bond Covenant Is Not Met, Then the Bond