Event of default

• payment default, i.e. the failure to pay principal or interest when it falls due for payment;
• prospective default, when payment is not yet due, but it is clear that it will not be capable of being paid when it does fall due. For example, a payment is due in three months' time but the borrower has been put into liquidation: and
• covenant default, when the borrower fails to keep a promise that it has made in the contract.