Independent financial covenant verification
Complex agreements.
Clear calculations.
A second check.
We turn your loan agreement’s financial covenants into clearly defined inputs and explicit compliance tests.
We work directly with your team to resolve questions and refine the model. You review and sign off on the model and period inputs before we perform the final verification.
Mathematical verification, not a black box.Powered by the Z3 SMT solver. Transparent contractual models, explicit financial inputs, and reproducible results.
Example agreement: Corning Energy Corporation / Citizens Bank, N.A., dated September 12, 2024. The accompanying demo uses fictitious figures and does not imply a client relationship or endorsement.
01 / DEFINE THE CONTRACTUAL MODEL
See exactly
what we will test.
We identify the financial covenants, follow their definitions and turn the agreed scope into variables and equations with clause and page references.
You receive a readable review document: what each input means, which period it covers and how it enters the calculation.
Formalized model ↗02 / DISCUSS & REFINE
A conversation.
Before a conclusion.
Formalization is an interactive professional service. Your team can challenge a definition, ask for an explanation or identify an amendment. We revise the model until the scope and treatment are agreed.
Questions and revisions are recorded. After the period inputs have also been supplied and reviewed, the complete package goes forward for sign-off. A material revision returns to review.
03 / SUPPLY THE PERIOD INPUTS
Your figures.
Clearly defined.
Your team supplies and confirms the financial magnitudes required by the agreement. We calculate the consequences of those inputs using the approved model.
Each quarter is self-contained. Any required historical data is included explicitly in that quarter’s input package.
Example input JSON ↗04 / SIGN OFF THE COMPLETE PACKAGE
One agreed version.
Before verification.
Once the questions are resolved and the inputs are complete, your team reviews the final model, interpretation decisions and financial data together.
The model version and the period input package are signed off before we run the definitive verification. An unresolved interpretation or missing input remains visible; it is not silently assumed away.
05 / VERIFY & REPORT
A result you can follow.
After sign-off, we run the verification against the agreed model and confirmed inputs. The report includes a portfolio dashboard and sensitivity matrix, alongside the inputs, derived values, covenant outcomes, headroom and supporting contractual references.
The example report illustrates how those calculations and conclusions would be presented, using fictitious figures. It is not an actual client verification.
We use the Z3 SMT solver to check the agreed equations and constraints against confirmed financial inputs. The model and assumptions remain explicit and reviewable.
Results report ↗DISCUSS A PILOT
A focused pilot.
A clear scope.
Discuss one agreement, the covenants to be tested and the input package your team would review. Confidentiality and data-handling arrangements are agreed before confidential documents are shared.
semprecelta@gmail.comAn independent specialist.
CovenantMagus is an independent consultancy based in Switzerland, focused on financial covenant verification for US private credit and direct lending teams. The service is personally led and delivered by an applied mathematics PhD and software engineer.
Your team confirms the inputs and reviews the contractual model. CovenantMagus is responsible for the formalization and calculations within the agreed scope. Legal and accounting judgments remain explicit review matters.
The service does not independently audit the underlying financial statements or provide a legal opinion.