Jérôme is of course 100% correct here, and most covenants contained in a credit agreement are logical things like right of first refusal on further equity issuances, required assent in further debt issuance, annual limitations on capital spending, entering into certain contractual agreements, industry-specific requirements like limitations on plate spend in publishing or on programming spend in television, and so forth. Logical things a bank does to protect the level of risk at which they issued the initial debt.

This being said, when the CEO of the company you work for is, today, talking about covenants, she's talking about the coverage ratios. The rest are, especially now that debt and equity markets have largely shrivelled up and investment is way down, less relevant and, in any case, rarely cause an involuntary default. It's this latter thing corporate masters are most fearing today.

And, as Jérôme says, financial ratio covenants tend to be highly cyclical, and so, in the case of the US and the UK, we see highly cyclical monetary and fiscal policy accentuated by private market behavior.

And not enough stimulus, and the wrong kind.

Things are goign to get ugly over here, that's what my gut is saying.

Fai de bèn a Bertrand, te lou rendra en cagant