If a Bond Covenant Is Not Met, Then the Bond

question 51

True/False

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.

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Definitions:

Discharge

The completion, termination or nullification of a legal obligation or duty.

Obligations

Duties or responsibilities imposed by law, contract, or moral principals.

Contract

A legally enforceable agreement between two or more parties with mutual obligations.

Terminated

Ended or concluded, often referring to the cessation of employment, contracts, or legal agreements.