This topic provides systematic instructions about the procedure to link covenant to facility.

1. Click Next in previous data segment to proceed with the next data segment, after successfully capturing the data.
   The Covenant Details screen is displayed.

   Figure 2-23 Covenant Details

   
   

   
   Description of "Figure 2-23 Covenant Details"

   
   

   Multiple covenants can be linked at entity level.

   Note:

   For backdated facility, covenants linked to the facility will be tracked from the facility book date.
2. Click icon.
   The Covenant Details screen displays.

   Figure 2-24 Covenant Details

   
   

   
   Description of "Figure 2-24 Covenant Details"

   
   

   Table 2-28 Covenant Details

   Fields	Description
   Covenant Code	Select the covenant code from the LOV. Active covenants maintained under covenant master maintenance of covenants domain are available for linking.
   Covenant Name	Covenant name of the selected covenant code gets defaulted from covenant master maintenance and is not editable
   Description	Displays the description based on the selected covenant code. Defaulted description can be modified at entity level.
   Classification Type	Select the classification type. The available options are: External Internal Covenant classification type is defaulted from the Covenant Maintenancescreen on selecting covenant. Same is not modifiable at entity level.
   Covenant Type	Select the covenant type from the drop-down list. The available options are: Internal External Covenant classification type is defaulted from the Covenant Maintenance screen on selecting covenant.
   Revision Frequency	Select the frequency from the drop-down list. The available options are: Weekly Fortnightly Monthly Quarterly Half Yearly Yearly Custom Frequency of the specified covenant is defaulted here based on the details maintained at Covenant Maintenance screen. Defaulted frequency can be modified by user during linkage Note: Frequency can be modified after save and authorization of the Facility covenant record. You can modify the Frequency from a lower one (say – weekly) frequency to a higher one (say – Monthly) or vice-versa. You are allowed to change a covenant's frequency during the covenant period - either before the notice date or after the tracking task generation for the next instance. All existing restrictions for frequency will continue to be there during the modification.
   Notice Days	Displays the number of days prior to revision date of the covenant gets defaulted from Covenant Maintenance. Notice days are mandatory when frequency is custom, fortnightly, weekly and above. Covenant is available for tracking during the notice days prior to revision date. Note: Notice Days must be less than the Custom Days in case Custom Days is selected as Frequency. In case the Custom Days value is 1, the system does not allow to capture Notice days. Notice Days can be a maximum of 30 days even if the Custom Days is more than 30 days. If Fortnightly is selected as Frequency, the notice days must be less than 14 days. Notice Days can be modified after save and authorization of the Facility covenant record. The Notice Days can either be increased or reduced, and it will update the Notice date in turn. You are allowed to change a covenant's Notice days during thecovenant period - either before the notice date or after the tracking task generation. Notice date modification before task generation will be applicable for current instance duly considering the date on which it is done. Modification after task generation will be applicable for next instance. All existing restrictions for notice days will continue to be there during the modification.
   Start Date	Start date indicates the effective date of covenant for the particular facility. Note: Start Date cannot be back date. Start Date can be current date or future date. Start Date cannot be modified after saving and authorizing the facility covenant record. This is applicable for current dated as well as future dated covenants.
   End Date	Specify the end date of covenant. After this end date, covenant tracking or notification generation is not applicable. The system performs certain validations for covenant end date as shown below based on the dependencies like Frequencies and Review/Notice/Grace days. For more information, refer #GUID-19F9AE7F-0703-408A-8E4C-58916C2E0F44/GUID-0BFEED1B-33A7-4D2F-9AAA-68CF37F07D4F Note: End Date is not mandatory. The authorization and saving of the Facility covenant record allow for a modification of the End Date.
   First Review Date	The system derives the first review date considering start date + frequency Note: The Frequency modification post authorization will also update the next Review date of the current or future covenant tracking instance. Subsequent Review date gets updated based on the first Review Date + Frequency specified. Examples for the Review date calculation of different frequencies and combinations For more details, refer Table 2-30
   Grace Days	Displays the grace days maintained in the Covenant Maintenance screen gets defaulted here based on the Covenant Code selected. Note: Grace Days must be less than the Custom Days in case Custom Days is selected as Frequency. In case the Custom Days value is 1, the system does not allow to capture Grace days. Grace Days can be a maximum of 30 days even if the Custom Days is more than 30 days. If Fortnightly is selected as Frequency, the grace days must be less than 14 days. Grace Days can be modified after save and authorization of the Facility covenant record. The Grace Days can be increased or decreased, and it will update the tracking end date in turn. You are allowed to change a covenant's Grace days during the covenant period – either before the review date or after the review date. Change of Grace Days before the review date - the new grace days will be applicable from the current covenant tracking instance. Change of Grace Days after the review date - the new grace days will be applicable from the next covenant tracking instance.
   Monitoring Information Details	If Between is selected as the Covenant Target Condition, the system derives the covenant compliance status as met only if covenant (value/percentage/ratio) is between specified Target from value and Target to value’. Example: Covenant = Debt to Equity ratio Monitoring information = Balance sheet Formula = Total Liabilities / Total Equity Covenant Target condition = BETWEEN Target type = Ratio Target From Value = 1 Target To Value = 2 If Greater than is selected as Covenant Target Condition, the system derives the covenant compliance status as met only if covenant (value/percentage/ratio) is greater than the specified Target fvalue. Example: Covenant = Free Cash Flow Monitoring information for the covenant = Cash Flow Final Formula = Operating Cash Flow – Capital Expenditures Covenant Target condition = GREATER THAN Target type = VALUE Target Value = 200000 For the above case, system expects cash flow to be greater than USD 200000. For the above case, the system expects the debt to equity ratio to be between 1 and
   Formula	Formulafor arriving at covenant condition gets defaulted from covenant master maintenance onselecting the covenant code. This is applicable for financial covenant.
   Target type	Target type configured for the covenant gets defaulted from covenant master maintenance
   Target Value	This field value gets defaulted from covenant master maintenance on selecting the covenant. Defaulted target value can be modified at the linkage level. When the covenant target condition selected is ‘Between’, then system populates two fields Target Value 1 and Target Value 2 to enter from and to values to be considered for the covenant.
   Covenant Check Condition	Select the covenant check condition.
   Compliance Status	Select the compliance status. The available options are: Met Breached
   Covenant Status	Displays the covenant status.
   Last Check Value	Displays the last check value.
   Deferred Due Date	Displays the deferred due date.
   Remarks	Specify the remarks, if any.
   Linkage Details	This section displays about linkage details.
   Linkage Type	This field is defaulted as Facility,Collateral,or Customerbased on the covenant selected.

   Table 2-29 Frequencies and Review/Notice/Grace days

   Business Date	Start Date	Frequency	Review Date	Notice days	Notice date	End Date Existing	Modified End Date	Modification	Remarks
   13TH OCT	10TH OCT	MONTHLY	10TH NOV	5	5TH NOV	10TH JAN	10TH MAR	ALLOWED	-
   13TH OCT	10TH OCT	MONTHLY	10TH NOV	5	5TH NOV	10TH JAN	1ST DEC	ALLOWED	Last covenant will fall due on 10th November
   13TH OCT	10TH OCT	MONTHLY	10TH NOV	5	5TH NOV	10TH JAN	10TH NOV	ALLOWED	-
   13TH OCT	15TH SEP	MONTHLY	15TH OCT	3	12TH OCT	15TH JAN	15TH OCT	ALLOWED	-
   13TH OCT	15TH SEP	MONTHLY	15TH OCT	3	12TH OCT	15TH JAN	14TH OCT	NOT ALLOWED	Modified end date cannot be less than next Review date, if tracking task is triggered
   13TH OCT	15TH SEP	MONTHLY	15TH OCT	1	14TH OCT	15TH JAN	14TH OCT	ALLOWED	Modification is allowed since tracking task is not yet triggered. Covenant tracking is stopped
   13TH OCT	15TH SEP	MONTHLY	15TH OCT	1	14TH OCT	15TH JAN	13TH OCT	ALLOWED	Since covenant tracking task is yet to be generated, end date can be modified as current business date
   13TH OCT	15TH SEP	MONTHLY	15TH OCT	2	13TH OCT	15TH JAN	14TH OCT	NOT ALLOWED	Since tracking task is triggered, end date modification is not allowed
   13TH OCT	15TH SEP	MONTHLY	15TH OCT	2	13TH OCT	15TH JAN	12TH OCT	NOT ALLOWED	Since modified end date is backdated, modification is not allowed
   13TH OCT	15TH SEP	MONTHLY	15TH OCT	2	13TH OCT	15TH SEP	15TH JAN	NOT ALLOWED	Since end date has already passed, no modification is allowed

   Table 2-30 Examples

   Start date - 04-Apr-2017
   First Review Date
   Frequency	Without Start Month + Due Date
   Daily	05-Apr-17
   Weekly	11-Apr-17
   Fortnightly	18-Apr-17
   Monthly	04-May-17
   Quarterly	04-Jul-17
   Half Yearly	04-Oct-17
   Yearly	04-Apr-18
   Custom (5)	09-Apr-17

3. Click Create to create the covenant details.
4. Click Save and click Next to navigate to the next data segment.