Financial covenants and related definitions for a real estate finance facility agreement, either syndicated or bilateral. The covenant package comprises a loan to value (LTV) covenant, an interest cover covenant and a debt service cover covenant. Wording has been included to allow the borrower to remedy a covenant breach by either partially prepaying the loan or making a payment into a blocked account, which will be treated as a prepayment of the loan. The interest cover and debt service cover covenants and related definitions contain optionality so that they can work on either an actual (look-back) or a projected (look-forward) basis.

These standard clauses include integrated drafting notes that explain the commercial reasons for the covenants and related definitions and highlight some common negotiating and practical issues.