• Incur any additional debt or issue guarantees for third parties
• Enter into any hedging contracts other than the agreed hedging of interest
rate or exchange rate risks (cf. §9.2 / §9.3.1)
• Incur any capital expenditure not agreed to by the lenders (even if it is funded
by equity—this is to ensure the specifications of the project are not changed
without lender consent)
• Incur operating costs not provided for in the agreed annual budget (usually
subject to an agreed tolerance level— cf. §8.7.3)
• Sell, lease, or otherwise transfer any of its assets (subject to a de minimis ex-
ception)
• Change its financial year end or auditors
It can be seen from the above that the difference between positive and negative
covenants is often a matter of wording; a ...