Minimum Liquidity Covenant
Short definition
A minimum-liquidity covenant requires cash and/or drawable commitment not to fall below a floor. It is a legal floor distinct from the internal minimum-cash policy; the tighter one binds.
Detailed explanation
The definition is the point: unrestricted cash, RCF unused, trapped out, average versus period-end? Period-end cosmetics can pass while the 13-week trough fails — some packs want an average.
A breach stops draws, which then stresses the floor further (a liquidity spiral).
Why it matters for the CFO
It is the legal floor of the cash budget. Dividends are paid from above this floor.
How it is calculated
Test: Tanımlı likidite ≥ Taban (kasa ve/veya çekilebilir limit; paket yazar)
Variables in the formula
- Min liquidity: Contractual cash/line floor
How to read it
Floor 45 mn TL, cash 60, drawable 10 (if the definition is cash+RCF) → 70, headroom 25 mn TL. The floor is not a universal day-count.
Numerical example
Definition: unrestricted cash. Floor 45 mn TL, cash 50 → headroom 5 mn TL — tight.
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What to learn next
Definitions are educational. They are not investment, credit or tax advice.