As the credit crisis makes it tougher to find funding, both banks and corporate borrowers are paying closer attention to the covenants, or restrictions, in loan and debt agreements. Now a couple of treasury consultancies have launched an Internet-based solution that helps finance departments ensure they comply with all their loan covenants. The Debt & Covenant Manager sets out the contents of loan agreements in a wiki format, using a set of interlinked Web pages. It is produced by Debt Compliance Services, a joint project of Corporate Finance Solutions and Greenwich Treasury Advisors.

"People think compliance is mostly financials compliance and a couple of very big negatives," says Jim Simpson, managing partner of Corporate Finance Solutions, citing negative covenants such as restrictions on asset sales or mergers. But covenants can involve a range of other issues, he says.

"Some of these covenant issues are mundane. A number of them are real traps," Simpson says, noting, for example, that loan agreements may require companies to submit IRS Form 5500, the annual retirement plan filing, to their lender. "Uncured, it's as big a default as a financial covenant breach," he says.

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