Maintenance Covenant

Maintenance covenant is a financial covenant tested periodically while a loan remains outstanding, not only when the borrower takes a specified action.

Why this matters to income investors

Regular testing can provide earlier warning of weakening borrower finances.

How to use maintenance covenant in your research

Read the borrower or issuer disclosures for collateral, payment priority, covenant terms, and missed payments. Then check how a deterioration could reduce interest income or the value available to support future dividends.

This material is general education and information, not individualized investment, tax, or legal advice.