Solutions · Buyside

Know the covenant package before books close

Primary-market timetables do not leave room to read a 400-page indenture. ExactCov screens the package the hour it arrives, places it against precedent, and lets you ask the portfolio the questions that matter, each answer cited to its clause.

Offering memoranda and indenturesCredit agreementsAmendments and consent solicitationsCompliance certificatesYour precedent libraryMaintenance-covenanted holdings
The problem

The document gets its one serious reading before close.

Every question afterwards goes back to the PDF. Capacity, portability, drop-down risk and consent thresholds are checked on the names someone remembers, and the summary written at close quietly stops being true after the first amendment. Under primary-market pressure, the summary of terms is read as if it were the document.

ScreenedThe full package from the OM or indenture, cited, before books close.
ComparedPlaced against sector precedents with the clauses side by side.
QuestionedAsk the portfolio in plain words, in ExactCov or from Claude and ChatGPT, and get the clause back.
WatchedMaintenance-covenanted holdings tested every period alongside, with headroom trends.
The register

What a screen produces

In the hour the documents arrive, and kept current through every amendment.

Capacity and leakage

What the package allows the issuer to do to you.

  • Day-one debt and lien capacity, ratio plus baskets
  • RP capacity and unrestricted subsidiary transfers
  • Value-leakage flags: drop-downs, uptiers, J.Crew and Serta patterns

Structure and events

What changes the picture.

  • Portability and the leverage test it turns on
  • Change of control, put rights and consent thresholds
  • Cross-default reach and the order it fires in

Precedent

What the market gave on the last twelve deals.

  • Each term placed against sector precedents
  • Looser or tighter, by how much, with the clauses side by side
  • Your own library, read once and kept
The problem

The covenant package nobody reads twice

One serious reading at close produces a filed PDF and a summary. Over the following years every capacity, headroom and consent question goes back to the PDF, while an amendment in year two leaves the summary out of date. A register is the reading you keep.

Read the piece
One reading deal team, counsel, weeks before close filedPDF capacity foran add-on? headroom atthe next test? is this disposalpermitted? each question re-opens the PDF: an hour for someone who knows the deal, half a day for someone who does not closeyear 1year 2year 3 amendment: threshold steps down. The summary written at close is not updated. Summary, term sheet, credit paper accurate at close; answers questions from memory until the first amendment a snapshot has the same problem as the document: it is read once
The document gets its one serious reading before close. Every question afterwards goes back to the PDF, and the summaries written at close quietly stop being true.
For the portfolio

Extraction is where monitoring starts, not where it ends

Extraction produces a cited snapshot of the terms. Monitoring is the loop that runs against that snapshot for years: arrivals, tests, threshold changes, routing and stale detection. For the maintenance-covenanted names you hold, the same register runs the loop.

Read the piece
EXTRACTION: a snapshot ProspectusISDA Schedule Amendmentside letter Terms, cited yours or ours seeds LIVE REGISTER: a loop that runs every day Register calendar, queue, audit NAV arrives tests re-run breach routed threshold moves silence: stale chase logged a photograph of a moving object on the left; the thing that keeps moving on the right
Extraction produces a cited snapshot of the terms. Monitoring is the loop that runs against that snapshot for years. ExactCov consumes the snapshot, whoever produced it.
From our research

Right number, wrong clause

An analyst verifying a screen checks values. The failure that survives a spot check is the value that is right and the clause it points to that is not. That quadrant was 4.6 percent of fields before the validator and is 1.1 percent after it, which is why every figure in a screen carries a citation the analyst can open, and why the citation is checked before it is shown.

Measuring citation faithfulness
1,840 fields, scored on both halves of the answer value accuracy alone would report 98.3%. Citation-exact reports 97.4%. The difference is one quadrant. clause cited is the operative one yes no valuecorrect yes no 97.4% right, and provably so 1.1% passes every spot check, fails the audit was 4.6% before the validator 0.9% misread, but you can see where 0.6% wrong twice; caught by the validator production first pass, September 2026. The second read on the routed 15% of fields takes the top-left cell to 99.7%.
The top-right cell is the one to worry about. The number matches the answer key, so a reviewer checking values signs it off, and the clause it points to says something else.
Go deeper

Reading for buyside

Short pieces from the blog and the measurements behind them from Research.

Blog · 3 min

The covenant package nobody reads twice

Documents get read hard once at close, then filed. Every question afterwards, capacity, headroom, permitted payments, sends someone back to a PDF. The problem, framed without naming a product.

Read
Blog · 3 min

How much can they actually raise?

Incurrence capacity is the question that keeps returning and never has a stored answer. What a capacity table looks like, why it needs a history, and why it is a credit signal months ahead of the maintenance tests.

Read
Blog · 3 min

"What's market" is sitting in documents you have already read

Every desk reconstructs market terms from memory and a few recent deals. The distribution of every basket, cure and blocker across your own closed deals is a query once the corpus is in a register.

Read
Blog · 3 min

Extraction is where monitoring starts, not where it ends

LLM extraction from prospectuses and ISDA schedules works. What it does not give you is a register that stays live: a fresh NAV arriving, a test re-running, a threshold moving, a breach routed to the right desk.

Read
Research · 3 min

Right number, wrong clause: measuring citation faithfulness

Field accuracy is the metric everyone reports. It misses the quadrant that fails an audit: the value is correct and the clause it points to is not. That quadrant was 4.6 percent of our fields before the validator and is 1.1 today, inside a 97.4 percent first pass, and it is invisible to a spot check.

Read
Research · 3 min

How deep do defined terms go? Definition chains in 300 agreements

A leverage covenant is one line. Resolving it means following Consolidated EBITDA into Consolidated Net Income and onward, a median of four hops and up to nine. Where the chains go, how often they leave the document, and what that does to extraction.

Read
Getting started

Run it in parallel. Don't run a pilot.

The documents are loaded once. What already arrives by email is copied to a mailbox we watch. Nothing changes for the team, and after one cycle the two outputs are compared, disagreement by disagreement.

Week 0Holdings loaded, packages extracted and checked by the analysts against their own memos.
Weeks 1 to 4New deals screened on both sides. Precedent comparison and portfolio questions answered from the register.
Week 4Compare: terms the memo missed, leakage flags the desk had not seen, names near a trigger.
AfterPer issuer in scope. Analysts ask the register from ExactCov or from Claude and ChatGPT.

Screen a live deal with us

Bring an OM from a deal in market and the last three you bought in the sector. We show the package, the precedent comparison and the leakage flags, cited.