Examples of Financial Covenants in a sentence
In May 2020, the Company obtained a covenant waiver from the lenders under the Revolving Credit Facility, the holders of the US Notes and the trustee under the Whitbread Group Pension Fund in respect of the relevant Financial Covenants as it was likely that the Group would not have been in compliance with such Financial Covenants when they were otherwise next due to be tested on account of a diminished financial performance resulting from the COVID-19 pandemic.
Such covenant waivers provided that the relevant Financial Covenants would not be tested in respect of the 12-month periods ending on 27 August 2020, 25 February 2021 and 2 September 2021.
It is currently expected that the US Notes will be redeemed or repaid in the near future, however if the US Notes remain outstanding, the Group expects to have refinanced or requested amendments to the existing waivers in place in respect of the US Notes prior to the date on which the Financial Covenants thereunder are next tested.
However, there can be no certainty that in the longer term the Group will be able to maintain the required financial ratios in order to comply with the Waiver Period Covenants, Financial Covenants or any future financial covenants to which the Group is subject.
In the event that the Group were not in compliance with the Waiver Period Covenants or the Financial Covenants when tested, or were in breach of other covenants, tests or restrictions contained in the Group’s financing agreements, it may result in an event of default which, if not cured or waived, could result in the acceleration of such indebtedness or, in the case of the Revolving Credit Facility, the cancellation of any committed facility.