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PC COVENANT TRACKING
100% Portfolio Coverage
100% Portfolio Coverage
How Elimentary delivers complete covenant coverage across 150+ portfolio companies
How Elimentary delivers complete covenant coverage across 150+ portfolio companies
How Elimentary delivers complete covenant coverage across 150+ portfolio companies
How a leading direct-lending fund automated covenant compliance using Elimentary
How a leading direct-lending fund automated covenant compliance using Elimentary
OVERVIEW
A direct-lending fund managing $8Bn+ in committed capital ran quarterly covenant testing across 150+ portfolio companies covering senior secured direct lending, unitranche, and asset-backed finance strategies. Testing leverage ratios, interest coverage, FCCR, and borrowing base certificates manually consumed 4+ hours per company each quarter. Full portfolio coverage was structurally impossible on a sample basis. Elimentary automated the full pipeline overnight, surfacing every breach before the morning stand-up.
A direct-lending fund managing $8Bn+ in committed capital ran quarterly covenant testing across 150+ portfolio companies covering senior secured direct lending, unitranche, and asset-backed finance strategies. Testing leverage ratios, interest coverage, FCCR, and borrowing base certificates manually consumed 4+ hours per company each quarter. Full portfolio coverage was structurally impossible on a sample basis. Elimentary automated the full pipeline overnight, surfacing every breach before the morning stand-up.
CHALLENGE
With 150+ portfolio companies and 4 hours of manual covenant testing per company each quarter, full portfolio coverage was structurally impossible by sample-based review alone.
With 150+ portfolio companies and 4 hours of manual covenant testing per company each quarter, full portfolio coverage was structurally impossible by sample-based review alone.
01. SLOW COVERAGE
01. SLOW COVERAGE
Credit managers reviewed only 15-20 portfolio companies per quarter. Covenant obligations in tighter unitranche and second-lien agreements, with shorter cure periods and tighter thresholds, were routinely deferred to the following test date.
Credit managers reviewed only 15-20 portfolio companies per quarter. Covenant obligations in tighter unitranche and second-lien agreements, with shorter cure periods and tighter thresholds, were routinely deferred to the following test date.
02. MODEL RISK
02. MODEL RISK
Each analyst maintained bespoke spreadsheet models per portfolio company with no version control, no shared schema, and no audit trail. At LP reporting and external audit, the absence of provenance created material compliance exposure.
Each analyst maintained bespoke spreadsheet models per portfolio company with no version control, no shared schema, and no audit trail. At LP reporting and external audit, the absence of provenance created material compliance exposure.
03. ESCALATION LAG
03. ESCALATION LAG
Covenant breaches were identified days after the test date. With cure periods typically 10-15 business days under the credit agreement, detection delay compressed both the remediation window and the fund's waiver negotiation lead time.
Covenant breaches were identified days after the test date. With cure periods typically 10-15 business days under the credit agreement, detection delay compressed both the remediation window and the fund's waiver negotiation lead time.
SOLUTION
Elimentary deployed a three-agent covenant intelligence pipeline, pre-loaded with credit agreement templates and GAAP accounting definitions, running overnight with results ready for morning review.
Elimentary deployed a three-agent covenant intelligence pipeline, pre-loaded with credit agreement templates and GAAP accounting definitions, running overnight with results ready for morning review.
01. AGREEMENT READING AGENT
01. AGREEMENT READING AGENT
Parses 200-400 page credit agreements, extracting leverage covenant definitions, interest coverage and FCCR thresholds, cure period mechanics, equity cure rights, and carve-outs, mapping each to a canonical compliance schema with clause-level source links.
Parses 200-400 page credit agreements, extracting leverage covenant definitions, interest coverage and FCCR thresholds, cure period mechanics, equity cure rights, and carve-outs, mapping each to a canonical compliance schema with clause-level source links.
02. BORROWING BASE AGENT
02. BORROWING BASE AGENT
Ingests the latest borrowing base certificate, applies eligibility criteria and advance rates from the governing credit agreement, and computes net availability and headroom, flagging ineligible asset classifications, concentration limit breaches, and availability blocks with clause-level provenance.
Ingests the latest borrowing base certificate, applies eligibility criteria and advance rates from the governing credit agreement, and computes net availability and headroom, flagging ineligible asset classifications, concentration limit breaches, and availability blocks with clause-level provenance.
03. COMPLIANCE AGENT
03. COMPLIANCE AGENT
Surfaces all test results with pass/fail status, prior-period comparison, and clause provenance. Breach alerts route to the portfolio manager with a pre-populated remediation memo within minutes of test completion.
Surfaces all test results with pass/fail status, prior-period comparison, and clause provenance. Breach alerts route to the portfolio manager with a pre-populated remediation memo within minutes of test completion.
RESULT
100% Portfolio Coverage
100% Portfolio Coverage
The fund moved from sample-based testing to complete portfolio coverage, eliminating the blind spots that previously left tighter covenants unmonitored between quarterly cycles.
The fund moved from sample-based testing to complete portfolio coverage, eliminating the blind spots that previously left tighter covenants unmonitored between quarterly cycles.
16X Faster Covenant Testing
16X Faster Covenant Testing
Testing time dropped from 4 hours to 15 minutes per portfolio company, enabling the fund to run complete quarterly coverage across all 150+ companies for the first time.
Testing time dropped from 4 hours to 15 minutes per portfolio company, enabling the fund to run complete quarterly coverage across all 150+ companies for the first time.
0 Breaches Missed
0 Breaches Missed
No covenant violation went undetected across the full deployment period. Every breach was surfaced with same-day notification and a pre-drafted remediation memo.
No covenant violation went undetected across the full deployment period. Every breach was surfaced with same-day notification and a pre-drafted remediation memo.
TESTIMONIAL
"Before Elimentary, a single covenant test run tied up a senior analyst for half a day. Now the pipeline runs overnight and my team reviews the flagged items at morning stand-up."
"Before Elimentary, a single covenant test run tied up a senior analyst for half a day. Now the pipeline runs overnight and my team reviews the flagged items at morning stand-up."
Head of Portfolio Management
Head of Portfolio Management
LEADING DIRECT-LENDING FUND
LEADING DIRECT-LENDING FUND
© 2026 Elimentary. All rights reserved.
© 2026 Elimentary. All rights reserved.
© 2026 Elimentary. All rights reserved.