Loan covenant evaluation

covenant_eval · v1.0.0

Evaluates current nature-risk observations against lender-defined thresholds and produces green, amber or breach status with traceable source evidence.

Inputs

• Covenant metric, comparison operator and threshold.
• Optional covenant-specific amber ratio; otherwise the pinned pack default.
• Latest eligible observation for the governed asset and metric.

Calculation

For a maximum-type covenant, an observation at or above the threshold is a breach; an observation at or above threshold multiplied by the amber ratio is amber. Minimum-type covenants reverse the comparison using threshold divided by the amber ratio. Other observations are green.

Outputs

• observed value, threshold, operator and status;
• evidence source type and record identifier;
• methodology-pack reference and signed evaluation manifest;
• lender work item for amber or breached positions.

Limitations

The method applies the configured contractual rule; it does not determine whether the covenant wording is legally enforceable or whether waiver, cure or materiality provisions apply. Missing eligible evidence must remain a data gap and cannot be treated as green.