Financial ratios and/or debt covenants compared to a reserved cash account - two different things. Sure, the cash account can be a small part of a debt covenant but is usually just that - a very small part.
Which debt covenants were breached? Often times they put these checks in when they think something bad is going to happen. Then a couple of years down the line they mean absolutely nothing, are breached (usually because the company has forgotten about one of them and accidently breaches them) and need to be restructured with the lender asking for something in return.
Which debt covenants were breached? Often times they put these checks in when they think something bad is going to happen. Then a couple of years down the line they mean absolutely nothing, are breached (usually because the company has forgotten about one of them and accidently breaches them) and need to be restructured with the lender asking for something in return.
Sounds like something like the above happened?