Sometimes called an Undertaking. A covenant is a solemn promise to engage in or refrain from a specified action. A covenant is a type of agreement analogous to a contractual condition. The covenantor makes a promise to a covenantee to do (affirmative covenant (US) / positive covenant (English Law)) or not do some action (negative covenant). Project financing transactions frequently also have information covenants covering the data / reports to be provided by the Borrower / Sponsors to the Lenders. A breach of a covenant is typically an Event of Default.