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Explain what a bond covenant in an indenture is and why it may be included. Explain the difference between an affirmative and a negative covenant.
Explain what a "bond covenant" in an indenture is and why it may be included. Explain the difference between an affirmative and a negative covenant. Categorize each of the following as affirmative or negative (of course briefly explaining why): a. limits on the issuer's leverage ration; b. a requirement to pay taxes when due; c. a statement of how the bond proceeds will be used; d. a prohibition on certain risky investments by the company; e. limits on the issuer's sale of corporate assets; f. a requirement to maintain the corporation's current lines of business
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