Engagement
Lender Covenant Assurance Letter
Agreed-upon procedures on covenant calculations and specified balances for banks and other lenders that request independent confirmation between annual audits.
Banks financing Fukui manufacturers and trading houses often ask for independent confirmation of covenant math between annual audits. Our lender covenant assurance letter follows an agreed-upon procedures format: we recalculate the ratios the facility requires, agree the inputs to the books, and report factual findings.
The engagement is narrow by design. We do not opine on the full financial statements, and we do not advise on renegotiating terms. Scope is locked in a three-party understanding so the report matches what the credit officer expects.
Who it is for
- Borrowers with quarterly or semi-annual covenant reporting
- Companies refinancing facilities that require independent confirmation
Included
- Agreed procedures letter scoped with the lender’s checklist
- Recalculation of specified ratios from management’s schedules
- Factual findings report addressed as agreed with the parties
Outside this engagement
- A full financial statement audit opinion
- Negotiation of covenant terms with the bank
How the work proceeds
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1
Procedure agreement
Lender, borrower, and Kairo agree the exact calculations and documents in scope.
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2
Evidence and recalculation
We obtain the schedules, agree them to underlying books, and recalculate ratios.
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3
Findings report
A short factual report is issued without opinion language beyond the agreed procedures.
Ready to discuss scope?
Share your year-end date, reporting framework, and prior-year findings. We will reply with a draft engagement outline.
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