Debt Covenant Compliance Agent

A covenant breach that nobody saw coming can trigger default terms and a tense call with lenders. This agent tracks loan covenants every month. It reads the credit agreement definitions and calculates each covenant, such as leverage, interest cover and minimum liquidity, from the latest numbers. It then projects them for the next two quarters using the forecast. It checks that every adjustment used matches what the agreement allows. If headroom falls below the warning level, it shows what drives the drop and tests options such as paying down debt or timing spend. It drafts the quarterly compliance certificate and, for a projected breach, talking points for lenders. The CFO approves anything sent to lenders. Edge case: the agreement caps add-backs in its EBITDA definition, so the agent applies the cap instead of using the management figure.