TASK-FIN-102-03 · Task family
Breach, waiver & cure investigation. Breach detection, cure provisions, waiver interpretation and escalation.
Overview. Determine whether the breach can be cured, and if not, set out the options and escalate.
A borrower has breached its leverage covenant and its sponsor offers an equity cure. The agent has to compute the cure needed, check the cure limits in the agreement and work out what options remain.
Cure rights are limited. When they're exhausted, the remaining paths are a waiver or an amendment from the required lenders, which the agent escalates rather than decides.
Value to the buyer
Cure and waiver questions combine arithmetic and contract limits. Trains agents to check both.
Specification. The task family, field by field.
- task_id:
- TASK-FIN-102-03
- domain:
- Credit Analysis & Private Credit
- parent_environment:
- ENV-FIN-102 · Credit & Covenant
- target_role:
- Private Credit Associate
- objective:
- Determine whether the breach can be cured, and if not, set out the options and escalate.
- starting_context:
- The agreement's covenant and cure provisions, quarterly financials, the history of prior cures and the sponsor's notice.
- tools:
get_agreementget_borrower_financialscalculate_financial_ratioupdate_covenant_caserequest_credit_review
- required_actions:
- Confirm the breach
- Compute the cure amount needed
- Check the cure history against the cure limits
- Escalate with the available options
- expected_outputs:
- Breach and cure analysis
- Escalation to the credit committee
- Updated covenant case
- interaction:
- Agent plus a simulated credit committee.
- verification:
- Breach, cure amount and cure availability are recomputed. The escalation is checked for required content.
- reward:
- Accepting a cure that the agreement doesn't permit scores zero. Credit for correct analysis and escalation.
- difficulty:
- Calibrated against reference models during acceptance testing
- task_horizon:
- Multi-step analysis with an escalation. Execution limits are agreed with the buyer.
- delivery:
- Task instances with seeded agreements, reference analyses and verifier code.
- commercial_unit:
- Per validated task instance
Sample prompt. What the agent is asked to do, as a buyer would see it.
Halvard Industrial Holdings reports Q4 2026 net debt of $360.0m and covenant EBITDA of $80.0m against a maximum net leverage of 4.25×. Its sponsor offers a $5.0m equity cure. The agreement allows equity cures counted as EBITDA, no more than two in any four consecutive fiscal quarters and five over the life of the facility. Halvard used cures for Q1 2026 and Q3 2026. Assess the breach and the cure, and recommend next steps.
Verification criteria. What the verifier checks, and how.
Breach
360.0 / 80.0 = 4.50×, above 4.25×.
Cure needed
$4.71m would bring leverage to 4.25×. $5.0m would give 4.24×.
Cure limit
Q1 to Q4 2026 already has two cures, so a third isn't permitted.
Default
Without a cure the breach is an event of default once any grace period ends.
Options
A waiver or amendment needs the required lenders. The agent escalates and doesn't decide.
Key failure modes. Where agents go wrong on this task.
- Accepting the cure because the amount is sufficient
- Counting cures per calendar year instead of four consecutive quarters
- Recommending a waiver as if the agent could grant it
Other task families. The rest of Credit & Covenant, on the same FinanceWorld state.
- TASK-FIN-102-01
Credit agreement & amendment interpretation
Document navigation, clause precedence and contractual definitions.
Credit Analyst
- TASK-FIN-102-02
Financial covenant reconstruction
EBITDA adjustments, leverage and interest-coverage ratios under the agreement's calculation rules.
Loan Portfolio Analyst
- TASK-FIN-102-04
Credit portfolio monitoring
Multi-borrower analysis, reporting exceptions and risk summaries.
Loan Portfolio Analyst