The strength of speculative-grade bond covenants, which arewritten into the terms of debt agreements as a means to protectinvestors, fell to a two-year low in November, according to Moody'sInvestors Service.

The average covenant score, in which 1 is the strongest and 5the weakest, was 4.15 last month, the lowest since the ratingcompany began tracking the data in January 2011. Thirty percent ofthe bonds issued in November were so-called covenant lite, lackingsuch features as restricted payments and incurrence stipulations,compared with a 17.2 percent historical average, analysts led byAlexander Dill wrote in a report dated yesterday.

“November issuance was the weakest since the start of ourcovenant scoring,” the analysts wrote. “Abnormally light issuanceis often dominated by more creditworthy issuers with weakcovenants.”