After a period of expansion and investment that wasn’t ultimately matched by student number growth, the university had broken its banking covenants not once but twice. “I came in…to basically make sure it wasn’t [a case of] three strikes and you’re out,” Curtis told Times Higher Education. To avoid this scenario, universities are selling off buildings, cutting courses and axeing employees – leading some academics to see covenants as something of a big bad wolf. ADVERTISEMENTIn simple terms, covenants are the financial conditions that an organisation agrees to maintain when it borrows money. “There’s no doubt there’s a handful of universities that have either breached financial covenants or…are forecasting breaches in the future,” said Matthew Howling, principal associate at legal firm Mills & Reeve.
