Guidance on assessing the reliability period and covenant longevity, both of which are new concepts introduced in our DB funding code and underpinned by legislation.
Published: December 2024
Introduction
Although the reliability period and covenant longevity are new concepts, we expect that many of the principles and concepts covered in this section are already considered as part of your current covenant assessment processes.
Once a scheme has reached full funding on a low dependency basis, you should focus your assessment on covenant longevity and any material risks that could lead to the scheme not providing promised benefits to members. The reliability period is less likely to be relevant in this situation as no recovery plan will be required (given the well-funded position of the scheme). It is also not likely to be a key determinant of supportable risk, as most schemes, particularly those who have reached their relevant date, are likely to have already de-risked. Where a scheme has not yet reached its relevant date and is relying on the employer’s cash flows and the reliability period to run high levels of supportable risk (regardless of its funding position), we would still expect you to assess the employer’s reliability period.
We have included detailed, worked examples to illustrate how the assessment of the reliability period and covenant longevity should be undertaken in set circumstances.
Using management information to form a view on reliability and covenant longevity
Sensitivity and risk analysis
While many factors you will consider as part of prospects are qualitative, if shorter-term reliance on the covenant is higher, it may be appropriate to consider sensitivity and risk analysis of employer forecasts, especially when considering the reliability period.
Employers will typically prepare sensitivity forecasts under several scenarios over the short to medium term. The more sensitive future trading and cash flow forecasts are to key assumptions, the higher the pace at which these key metrics will diverge under different scenarios. This could lead to trustees concluding a shorter reliability period as reasonable certainty over cash generation declines more rapidly.
Sensitivity analysis may also be a useful tool for you when considering the value of an upside sharing mechanism. This may include a contingent funding mechanism where a share of cash or profits generated by the employer, or another agreed entity, are paid into the scheme as and when they occur, under a formalised arrangement.
You should recognise that sensitivity analysis prepared for another purpose, like an audit, may not be appropriate to use for your covenant assessment as it will have a different aim and focus. You should ensure that you understand how and why any analysis provided by management has been prepared so you can use and interpret it correctly.
Stress testing forecast assumptions
Where you identify material risks to the employer prospects and covenant, you should consider whether it is necessary to challenge and stress test the employer’s forecast assumptions as part of your covenant assessment and monitoring process. This will demonstrate whether the employer has the resilience to cope with potential downside scenarios. For example, you might review the employer’s financial forecasts to see if they could meet banking covenant tests under a downside scenario and review the timing of debt maturities to determine whether payments could still be met under these circumstances.
Assessing the period of reliability over cash flows (the reliability period)
Paragraph 31 of the Employer covenant section of the DB funding code states:
"An assessment of the employer’s financial ability to support the scheme is primarily forward-looking and should consider the following.
- The period over which trustees can be reasonably certain of the employer’s cash flow to fund the scheme (the reliability period)
- When assessing the reliability period, trustees should consider the employer’s current and forecast cash flows, to the extent that these are available and deemed reasonable, and the employer’s prospects. This includes (but is not limited to) assessing the stability of the employer’s market and its position within that market, its capital structure and overall resilience, and any foreseeable events that may reduce the level of certainty over future cash flows, either on a standalone basis or cumulatively. Such events may include a material refinancing or a potential change in regulations that could negatively impact the employer’s market.
- Most employers will only have reliability over the short to medium term (three to six years). However, some employers’ reliability periods may extend to the longer term based on employer-specific circumstances.
- Trustees should take a proportionate approach to assessing the reliability period. For example, a high-level assessment may be sufficient when the scheme has a short recovery plan and is running a lower level of risk relative to the level of covenant support. A more detailed assessment will be needed where the scheme is relying on a longer reliability period for recovery plan purposes, or to enable the scheme to take higher levels of supportable risk."
The reliability period represents the period over which you can be reasonably certain of the employer’s cash flows to fund the scheme, including eliminating any funding deficits and/or addressing downside events.
To determine the period of reliability over cash flows, you should consider the following.
- The availability and reasonableness of the employer’s cash flow forecasts. When assessing this, you should consider the historical accuracy of management forecasts, as well as the appropriateness of the assumptions underpinning these forecasts. Read Assessing cash flow for further guidance.
- The profit and loss account and balance sheet forecasts (where available) to understand the impact this will have on future cash generation.
- The matters (as outlined in the Prospects section), either on a standalone basis or cumulatively, impact the reliability period.
It may be reasonable to consider liquid assets with other employer resources when determining the employer’s wider, overall financial resilience (as part of your assessment of prospects which feeds into your overall assessment of reliability and covenant longevity), unless they have been committed to pay other creditors or used to support recovery plan payments or investment risk, to avoid double counting their support. Contingent assets should also be considered separately. See Contingent assets for more detail.
For most employers, we expect the reliability period to be no greater than the medium term (three to six years). However, some employers’ reliability periods may be shorter or longer, based on employer-specific circumstances. For example, the period may be longer where the employer has long secured income streams and a high level of resilience. You must fully document your considerations and conclusions.
As part of your assessment of the employer’s prospects, you should consider if there are any reasonably foreseeable events that alter the level of certainty over employer cash flows, either on a standalone basis or cumulatively. The end of the reliability period is likely to be marked by a prospective event or risk or a combination of events/risks, such as:
- uncertainty over the renewal of key large contracts
- the refinancing of current debt which is likely to be challenging
- a change in legislation or other regulations affecting the employer’s industry, where the employer has no strategy to mitigate the expected impact
- intellectual property rights being due to expire
Where you are unable to identify an event such as those listed above, you must make a judgement (with help from professional advisers where needed) on the extent to which you can be reasonably certain of future cash flows, particularly beyond the forecast period, based on your holistic assessment of prospects.
One method of doing this is to consider the divergence between available forecast sensitivity scenarios, or further projections beyond the forecast period. Certainty over costs and income streams is likely to be higher in the earlier years of forecasts, and then to decrease as predicting further into the future becomes more challenging. This means the divergence between forecast scenarios will likely become greater after the earlier years, reducing the reasonable certainty over the forecast cash flows. Where the divergence is judged to be too great, this could lead to the end of the reliability period.
In assessing the reliability period for NAME schemes, it may be appropriate for you to consider the point in time at which there is no longer reasonable certainty over the cash flow from the employers that pay the significant majority of the contributions into the scheme, and contribute the greatest proportion of your assessed maximum affordable contributions figure. If the scheme has an industry-wide employer participation, it may be appropriate to focus the considerations of prospects, which feeds into reliability, on an aggregate industry level. You should be mindful that the contribution structure could change over time, and you should therefore review the suitability of the approach above on a regular basis.
You should take a proportionate approach to assessing the reliability period, taking into account the following considerations.
- A high-level assessment may be sufficient when:
- the reliability period falls within three to six years, or less
- the scheme has a short recovery plan
- the scheme is running a low level of risk relative to the strength in covenant
- For schemes fully funded on a low dependency basis with sufficient surplus to retain full funding in a downside event, it would be reasonable to conclude that reliability is unlikely to impact the funding and investment strategies and not carry out an assessment to ascertain a reliability period. It is important not to confuse this with not needing to monitor the covenant or carry out a proportionate assessment at each triennial valuation. However, the focus is likely to be in other areas such as a high-level understanding of cash flows and covenant longevity.
- A more detailed assessment will be needed where the scheme is relying on a longer reliability period for recovery plan purposes, or to enable the scheme to take higher levels of supportable risk.
- Where a shorter reliability period is reflected in the scheme’s TPs and recovery plan length, and is sufficient to support the risk being taken by the scheme, you may feel it is sufficient to consider the reliability period in terms of being 'at least x years' rather than undertaking a detailed assessment to identify a longer reliability period.
Assessing covenant longevity
Paragraph 31b of the Employer covenant section of the DB funding code states:
"How long the trustee can be reasonably certain (based on information available at the time) that the employer will be able to continue to support the scheme (covenant longevity)
- For the purposes of this assessment, support refers to the longer-term ability of the employer to support the scheme along its journey plan to low dependency and beyond, even when that level of support may be uncertain or fluctuate over time.
- Covenant longevity will end when trustees do not have reasonable certainty that the employer, or its market will continue. Covenant longevity would also cease where uncertainty over the viability of the employer exists, which could lead to an insolvency or other event that could trigger the crystallisation of the scheme’s solvency deficit.
- For some schemes, covenant longevity may be finite, making it easier for trustees to pinpoint an exact timeframe for this period. For example, if an employer provides a single product or service that will no longer be required due to legislative changes in eight years and there are limited plans for the employer to diversify, the maximum longevity period would be eight years. For most employers, reasonable certainty over covenant longevity will not exceed ten years. However, some employers may be able to demonstrate a longer period. Trustees should be proportionate when assessing covenant longevity, particularly when this period is expected to exceed the relevant date"
While the reliability period considers cash flow forecasts and then factors in shorter-term prospect considerations, covenant longevity should be determined through the assessment of the employer’s prospects and of the wider group where interdependencies exist (for example where there is a guarantor).
Key determinants of longevity will be the industry in which the employer operates, its position within that industry and the diversity of its operations. For employers illustrating signs of financial distress, this is likely to be a materially limiting factor to longevity.
For certain schemes, covenant longevity may be more subjective. In this scenario, trustees may find the ability to look forward with reasonable certainty beyond a set point to be the limiting factor, rather than a specific future event that may alter the reasonable certainty that the employer will remain in existence.
In the case of NAME schemes, where the employer base represents a majority of the industry, you could base the analysis of prospects and longevity on the entire market dynamics and outlook. For this to be reasonable, you would need to be comfortable that you have an employer base that is representative of the industry (eg it doesn’t exclude key segments that might represent newer market entrants with higher growth prospects due to technology innovation compared to incumbents). You should also be comfortable that this is unlikely to change, and the scheme is last man standing.
For most employers, reasonable certainty over covenant longevity will not exceed 10 years. However, some employers may be able to demonstrate a longer period. You should be proportionate when assessing longevity and it may be reasonable to restrict consideration to the point at which the scheme is not expected to rely on the covenant of the employer. As long-term predictions are inherently more subjective, you may report longevity in terms of 'at least x years' provided you are not relying on longevity being longer.
Where a scheme’s long-term objective is to buy-out, it is likely to be appropriate for the covenant longevity assessment to consider only the timeframe required to reach the buy-out stage. Therefore, a more proportionate approach can be taken to the assessment. On the other hand, where a scheme plans to run on, a more detailed justification of the covenant longevity assessment is likely to be required, given covenant reliance may continue after the target funding level is reached.
Frequency in assessing these periods
Paragraph 32 of the Employer covenant section of the DB funding code states:
"Trustees should reassess these periods at each triennial valuation, as a minimum, and adjust the scheme’s journey plan accordingly, where appropriate."
As part of your valuation and more frequent monitoring processes, you should consider whether an event or general deterioration in performance or position could alter reliability and covenant longevity periods. Where this is the case, you should assess whether the level of risk being run remains appropriate.
Examples
Example 1: Single employer assessment of reliability period and covenant longevity with a key event impacting the reliability period
The scheme is supported by a single employer. There are no guarantees or other forms of contingent asset support in place.
The employer operates in a steady, mature market with a low barrier to entry, and has an established position with a loyal customer base. Its average contract has a term of a few months, with the longest usually having a term of around six to eight months.
The employer’s balance sheet includes property and machinery assets which are unencumbered. The employer is in a material net asset position.
Management has prepared a three-year forecast analysis which has been provided to the trustees and shows continued profitability and cash flow generation. Previous reviews of management forecasts against actual results have shown them to be accurate.
The employer has a term loan with a balloon repayment due in four years’ time. The employer will not have the funds to settle the balloon repayment without refinancing, but it has not previously had difficulty in obtaining required finance. During the forecasting exercise, management considered the potential impact on interest costs of refinancing and informed the trustees that if they were required to refinance in the current market conditions, the employer would incur higher interest rates and tighter financial covenants. It may even require providing security to lenders, depending on the trading at the time.
There are no foreseeable regulatory or legislative changes in the employer’s industry which could substantially affect the business.
The scheme investment de-risking strategy targets a low dependency investment allocation in thirteen years, in line with its relevant date in thirteen years.
Application of the guidance
After careful review with input from their covenant advisers, the trustees are comfortable basing their reliability considerations on the available management forecasts for the next three years, given the following:
- the underlying assumptions have been deemed to be reasonable
- management has historically achieved previous forecasts
- other available sources of information, including broker notes, credit rating agency analysis, and market consensus forecasts support the short-term forecasts prepared by management
The trustees then continue their assessment of the length of the reliability period considering reasonably foreseeable events, which could create uncertainty around the employer’s cash flow. Their analysis concludes the following, for the three key events identified.
- The low barrier to entry could negatively impact the employer prospects if new players enter the market. However, at the time of the analysis, it is considered unlikely that new players will enter the sector over the foreseeable future given its maturity, and any such entry would still likely require three to four years to have a noticeable impact.
- Failure to renew or obtain replacement contracts could impact the employer cash flows. However, this risk is expected to be mitigated by the employer’s established position, loyal customer base, and expected steady demand from the market.
- The refinancing of the loan in four years’ time is a relevant risk given that the availability, terms, and structure of any refinancing are unknown, and the employer is not expected to have other funds to settle the debt repayment. However, the unencumbered balance sheet provides additional flexibilities, as does the forecast free cashflow in the years before the refinancing.
While there is uncertainty introduced by the above events (in particular the refinancing), management appears to be able to manage the key risks outlined above. Therefore, the trustees’ covenant adviser concludes that the employer should continue to be cash generative beyond the forecast period. They also think that a reliability period between four and six years would be reasonable. If management takes steps to reduce the refinancing risk, for example setting out a strategy to retain some free cash flow over the period to the refinancing, the trustees are more likely to be comfortable adopting the longer end of the range. Given the assessment made by the covenant adviser to the trustees, the trustees consider it reasonable to conclude that the reliability period is five years.
In relation to the covenant longevity, the trustees’ analysis suggests that – subject to refinancing and given the established position of the employer, its balance sheet resilience, and absence of foreseeable regulatory or competition changes in the industry – there are no particular concerns around the employer ceasing operations, nor its viability, in the medium to long term. However, any longer-term expectation is inherently unpredictable. The trustees, therefore, decide a reasonable covenant longevity period would be at least ten years, with a reasonable expectation that this will be extended in the future, based on the information available at the time of the assessment. In this context, the trustees are comfortable with their existing investment de-risking strategy targeting low dependency investment allocation at the relevant date in thirteen years.
Example variant
If the above employer is highly leveraged, with a large part of its assets already providing security to lenders, the refinancing risks would be more relevant. Any terms would likely be less favourable to the business, and result in a greater level of uncertainty over future trading post the refinancing.
In such cases, the uncertainty over the cash flow could rise to a level where trustees may consider the reliability period to be four years, ie in line with the period up to the refinancing of the existing debt.
Example 2: Large single employer with key events ending both the reliability period and covenant longevity
The scheme is supported by a single employer. It operates in a steady, mature, capital-intensive sector, where it is one of the largest five to six firms in the world. The employer has operations across multiple locations, but only two products.
- The first one, representing 55% of trading, where the average contract has a term of a few months and is extended or replaced easily.
- The second, representing 45% of trading, where contracts usually have a term of seven years and are large, and the existing ones are expiring in five years. Management is comfortable these contracts will be extended given continued demand, but there is no certainty yet and no draft terms for any extensions.
The employer has recently reported record levels of trading and cash flow generation driven by a new economic cycle that led to increased demand and prices (this cycle will likely last another five to six years based on average historical cycle length).
Its balance sheet is mainly represented by property and machinery assets, trade receivables, and cash and cash equivalents, with a material net asset position and large, undrawn credit facilities. Financial leverage is limited and there are no material maturities within the medium term.
Given the steady, expected demand, multiple uses of the two products, and high barrier to entry, management has prepared a ten-year forecast analysis. This shows continued profitability and cash flow generation peaking around year eight of the forecasts.
The employer is exposed to material longer-term ESG risks, which could lead to sharp changes in demand or pricing, including in connection with the decarbonisation of the economy. It has not yet developed a strategy to mitigate this risk.
Application of the guidance
After careful analysis based on the information above, the trustees make the following observations.
- Management forecasts provide projections for a long period of time. These assume a certain level of stability for a number of key macroeconomic factors, which in practice have proved to be volatile historically over the different stages of the economic cycle. Sensitivity analysis on these assumptions to replicate the magnitude of downsides experienced in the past though show that the employer is still expected to be cash flow generative over the next five to six years, under the scenarios which have a reasonable probability of occurring.
- The renewal of the existing large long-term contracts in five years, which is still unclear, introduces additional uncertainty, given these contracts are responsible for a material level of trading and diversification of the employer’s offering.
- The employer is exposed to the structural risk of climate change and the global response to it. A climate scenario analysis suggests that, despite its balance sheet strength and position in the industry, the employer would be exposed to substantial risk if the economy transitions to greener energy systems, with material revenue and cost impacts in most of the scenarios modelled by trustees’ covenant advisers. This would result in negative cash flow and material financial leverage, threatening the employer viability by year nine of the forecasts.
Given the dynamics above, the trustees consider the reliability period to be five years, and covenant longevity to be nine years.
Example 3: Employer with reliability period ending due to diverging forecasts rather than a key event
The employer of the scheme operates in a growing market, which is considered strategically important for the long-term economic growth of the entire country, has a few established players, and has high barriers to entry. The employer’s products are patent protected, and continued research and development investments are strategically important to renew the product line when existing patents expire.
The employer has performed well historically in terms of renewing its product line, achieving the middle to top end of previous forecast ranges. Management noted to the trustees that the company has a new, promising pipeline that they are expecting to launch over the next two to four years, and have prepared the forecasts outlined below for the next eight years.
| Scenarios | Forecast year (£ millions) | |||||||
|---|---|---|---|---|---|---|---|---|
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | |
| Upside scenario | 10 | 11 | 12 | 14 | 18 | 21 | 24 | 26 |
| Base scenario | 10 | 9 | 11 | 12 | 14 | 15 | 16 | 16 |
| Downside scenario | 10 | 8 | 9 | 10 | 6 | 6 | 4 | 6 |
The key variable sensitised among the three scenarios offered by management is the degree of success of the new pipeline of products.
The employer’s balance sheet mainly comprises property and machinery assets, and cash and cash equivalents. The employer has immaterial levels of external debt.
Application of the guidance
After carefully reviewing the information provided by management, the trustees and their covenant advisers make the following observations.
- Management has a proven track record of achieving previous forecasts. However, the forecast projections provided show an increasing divergence between the scenarios, particularly after year four.
- The employer operates in a sector considered to be strategically important for the country. Therefore, key stakeholders have interests in the employer continuing to exist, and in all existing players keeping their market share to ensure a certain level of supplier diversification in the sector.
- The risk of new entrants impacting the status quo in the sector is limited given the high barriers to entry.
Following their assessment of the forecast scenarios, the trustees consider that the divergence in cash flows is large enough from year five onward to create uncertainty in the level of cash flows that the employer will generate. They therefore consider the reliability period to be four years.
Given the strategic importance of the sector and of the employer within this sector, the trustees do not have material concerns around the employer ceasing operations in the medium to long term. The trustees require a longevity period of eleven years to reach their target of buying out the scheme. They have therefore focused their prospects assessment upon the next eleven-year period. They have not identified any factors as part of their prospects assessment, which would suggest the employer would face materially increased insolvency risk based upon the information available at the time of their review. They therefore conclude that covenant longevity is at least eleven years.
Example 4: Single employer with long reliability and covenant longevity periods
The scheme is sponsored by a sole employer operating in a mature, capital intensive market with high barrier to entry. The market is characterised by long-term contracts, typically ten to fifteen years, due to steady demand, and the need for specific long-term capital investments in heavy equipment and infrastructure serving these contracts. A number of the current contracts are due to run out in eight years’ time. Although there has been no agreement for renewal, management consider it reasonably likely that most of these will be renewed, albeit the value of each contract will need to be re-negotiated.
The employer’s balance sheet is dominated by tangible assets, with cash and other funds reserved for the decommissioning activities being the second and third largest items. There is a debt maturing in five years, but this is marginal compared to the cash balance and expected future cash flow generation. The employer is in a material net asset position.
Management has prepared a fifteen-year forecast analysis, showing continued profitability and cash flow generation. Management has a good track record of achieving forecasts, and these forecasts appear to be consistent with third-party industry research.
The commitment to achieving net zero carbon emission by 2050 by the government of countries where the employer operates represents a potential shift in the applications of the employer’s equipment and infrastructure. These will need to be repurposed over the next fifteen years, something that is expected to be expensive. However, the employer has already undertaken important investments and tests to be able to adapt the characteristics of its products to the new requirements. It is ahead on these matters compared with key competitors, and governments have announced policies to support the industry. This includes specific support to the employer, including research and development funding and other measures to ensure the burden of asset stranding is not entirely placed on industry players.
Application of the guidance
After careful analysis from the covenant adviser, the trustees make the following assessment.
- Management forecasts provide projections for a long period of time. These are based on long-term contracts, are in line with the wider, third-party expectations for the industry, and management has a good track record of achieving forecasts. Assumptions underpinning the forecasts appear appropriate, but a high-level sensitivity analysis suggests a wide range of outcomes following year eight of the projections, depending on the terms for the renewals of the contracts expiring at that point.
- Given the profitability of the employer, absence of material risk of new entrants, and the continued planned investments in equipment and infrastructure to support the business, the employer should be able to continue to be profitable and generate positive cash flow even beyond the forecast period.
- The materiality of the cash balance and expected cash flow generation means that there is limited refinancing risk in relation to the debt maturing in five years.
- The employer is well positioned in relation to the challenge emerging from net zero emission targets over the next fifteen years, given its balance sheet resilience, progress on de-risking its technology/ products, and further support from governments.
Based upon the facts and assessment as noted above, the trustees consider the reliability period to be eight years and the covenant longevity period to be at least eighteen years. The covenant longevity period is also supported by the fact that the trustees consider management’s view on the likelihood of contract renewals in eight years’ time being high to be reasonable.
Example 5: Multi employer assessment of reliability and longevity
The scheme is sponsored by three employers (employer A, B, and C, all sitting within the same corporate group). Employer A has an obligation to support 60% of the membership, while B and C have an obligation to support 20% each. The scheme operates on a last man standing basis, and the trustees have determined that it is reasonable to aggregate the employer cash flows for the purposes of the cash flow assessment.
Employer A is the main trading entity of the group, distributing and selling products manufactured by employer B. Forecasts reviewed by the trustees show that cash flows are expected to steadily increase over the five-year forecast period prepared, with no material changes expected in demand, or costs incurred.
Employer B is the manufacturing entity of the group’s products, selling primarily to employer A, but also to overseas subsidiaries in much smaller quantities. The income of employer B is primarily driven by the performance of employer A. The trustees’ assessment of cash flows determined that employer B was expected to have stable cash flows for the next five-year period.
Employer C manufactures and distributes one of the group’s products within a declining market. Demand for this entity is expected to start declining in three years, with management forecasting minimal revenue generation by year five. Employer C contributes less than 5% of the aggregate cash flows supporting the scheme from all three employers.
The trustees discuss with management whether there are any expected changes to legislation in the markets or additional likely changes in the market of employer A, and none are identified.
The group’s external loan finance matures in three years’ time. However, based upon the current and expected financial position of the group, and the loan finance available within the wider market, management expect to be able to renew their loan facility for a further five years with no material changes to the terms.
Application of the guidance
After reviewing the information provided by management and completing their covenant assessment, the trustees and covenant advisers make the following conclusions.
- Employers A and B have not been identified as having any material risk exposure raising concerns over their medium-term cash flows, nor over their viability over the longer term.
- Although employer forecasts only extend to five years, the trustees do not think there is a material risk of divergence of cash flows in year six for employers A and B, in that there would no longer be reasonable certainty over the cash flows generation.
- The outlook is more concerning for employer C, with expected material decline in demand from year three of the forecasts to minimal revenue generation in year five. However, the trustees do not consider the loss of c.5% of the aggregate cash flows of the employers to be a material change in the overall cash flows supporting the scheme. They therefore do not think this will affect reasonable certainty over cash flows.
- As the scheme operates on a last man standing basis, the trustees conclude that, given the likely loss of cash flows to support the scheme from employer C from year three onwards, employers A and B will be required to support the additional 20% of the scheme liabilities once employer C is no longer able to.
Given the concerns over employer C, and the last man standing nature of the scheme, the trustees consider it reasonable to base the reliability and covenant longevity of the employers in aggregate on employers A and B.
The trustees conclude, based upon their assessment as noted above, that the reliability period is six years.
Their covenant assessment has not highlighted any expected concerns over the covenant longevity of the group or employers A and B. Therefore, the trustees conclude that the employers’ covenant longevity is at least ten years.
We may revise the covenant guidance when needed and include industry feedback. Send comments or queries about the new guidance to covenantguidance@tpr.gov.uk.