covenant-lite
Law adjective
Describing a loan that dispenses with maintenance financial covenants and relies instead on incurrence-based tests, giving the borrower greater flexibility.
In the frothy market the deal was priced as a covenant-lite term loan B with no leverage maintenance test.
Business adjective
Describing a loan that lacks the usual maintenance covenants, giving the borrower more flexibility and lenders less protection.
In a frothy credit market, sponsors pushed through covenant-lite terms that would have been unthinkable a decade earlier.
Rarity runs from 0 (a word everyone knows) to 100 (almost never seen outside specialist or literary writing). Level is the word's real difficulty on the CEFR scale, from A1 to C2.
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