I study the effect of bank interventions over bond performance surrounding loan covenant violations. By studying abnormal bond returns of nonfinancial firms with covenant violations from 1996 through 2008, I show that bondholders benefit from bank's influence over the governance of violators. Both short-term and long-term abnormal bond returns are significantly positive after covenant violations. I find that cross-sectional abnormal bond returns are positively related to the probability of bank interventions. Further, I show that forced CEO turnover is positively associated with the probability of bank interventions. Firms with forced CEO turnover tend to have better bond performance. I conclude that bank interventions have positive effects on the value of bondholders.