| Acceleration Covenant | |
 A clause included in certain debt securities and swap agreements stating that the immediate collection of payment and termination of contract will take place should default or a downgrade of debt occur. |
|
 This covenant helps to protect parties that extend financing to businesses in need of capital. Under an acceleration covenant, the borrowing party must maintain a specified credit rating in order to prevent termination of the contract and immediate repayment. |
|
 Junk Bonds: Everything You Need to Know - Don't be fooled by the name - junk bonds may be for you if you know how to analyze them. What Is A Corporate Credit Rating? - For investors considering buying debt securities, a credit rating is an essential tool. |
|
Related Terms
 |