Covenant Monitoring & Compliance Surveillance

A covenant breach almost never announces itself. A compliance certificate arrives a few weeks late. Leverage creeps up two quarters in a row. Headroom that was comfortable at origination quietly compresses. Manual monitoring catches these things when an analyst happens to look — and across a growing portfolio, nobody can look everywhere at once.

The agreement becomes the monitoring contract

The platform reads each credit agreement and its amendments to extract the covenant package: definitions, thresholds, test dates, cure periods, and reporting obligations. That extracted package is what gets enforced. As compliance certificates and borrower financials arrive, they are captured and spread — 5× faster than manual spreading — and each covenant is tested exactly as its agreement defines it, with the negotiated add-backs and carve-outs intact. Waivers and amendments are recorded against the covenants they modify, so the tested threshold is always the one currently in force.

Surveillance covers three failure modes. Hard breaches are flagged the moment a tested ratio crosses its threshold. Reporting failures are flagged when a certificate or statement is late or missing. Deterioration is flagged as a trend — headroom narrowing across periods — so the borrower conversation happens before the breach. Every alert routes to the credit team, and every breach determination is confirmed by a named analyst before it drives action.

Regulator-ready by construction

Every number in a covenant test is cited to its source page in the certificate or financial statement it came from. When an examiner or internal audit asks how a compliance status was determined, the evidence is the extraction, the calculation, and the approval log — assembled continuously as tests run rather than reconstructed under deadline. Credit, risk, and operations work from one covenant record per facility, portfolio-wide.