negative pledge

negative pledge
An undertaking given by a borrower to a bank not to create any other secured indebtedness, (whether ranking before or after the bank) without its consent - usually as part of the bank's standard documents

Easyform Glossary of Law Terms. — UK law terms.


negative pledge
An undertaking by a debtor to a lender not to create, or permit to subsist, security or otherwise encumber certain of its assets in certain circumstances without the prior written consent of the lender. It is a covenant usually found in a loan agreement or in the terms of a bond. In a bond, it may simply prohibit the creation of security in certain circumstances unless the same security is created for the bond on a pari passu basis. The purpose of a negative pledge is to ensure that other creditors do not obtain a preferred claim over the assets of the debtor in the event of insolvency.
Related links

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

Игры ⚽ Нужна курсовая?

Look at other dictionaries:

  • Negative pledge — Contract law Part o …   Wikipedia

  • Negative Pledge Clause — A negative covenant in an indenture stating that the corporation will not pledge any of its assets if doing so gives the lenders less security. Also be referred to as a covenant of equal coverage . A negative pledge clause is just another way for …   Investment dictionary

  • negative pledge — A document or a provision in a document in which a borrower agrees not to give any creditor a security interest in identified property owned by the borrower. American Banker Glossary An agreement in which the borrower agrees not to pledge any of… …   Financial and business terms

  • negative pledge — noun A type of loan or loan condition in which the borrower agrees with the lender not to allow any other lender or creditor to rank ahead for payment in the event of a liquidation. Such a loan is unsecured (ie. not backed by a charge over… …   Wiktionary

  • negative pledge — promise not to mortgage property …   English contemporary dictionary

  • negative pledge — A covenant in a loan agreement in which a borrower promises that no secured borrowings will be made during the life of the loan or will ensure that the loan is secured equally and ratably with any new borrowings as specifically defined …   Accounting dictionary

  • negative pledge — A covenant in a loan agreement in which a borrower promises that no secured borrowings will be made during the life of the loan or will ensure that the loan is secured equally and ratably with any new borrowings as specifically defined …   Big dictionary of business and management

  • Negative pledge clause — A bond covenant that requires the borrower to grant lenders a lien equivalent to any liens that may be granted in the future to any other currently unsecured lenders. The New York Times Financial Glossary …   Financial and business terms

  • negative pledge clause — A bond covenant that requires the borrower to grant lenders a lien equivalent to any liens that may be granted in the future to any other currently unsecured lenders. Bloomberg Financial Dictionary …   Financial and business terms

  • Negative campaigning — Part of the Politics series Political campaigning Finance …   Wikipedia

Share the article and excerpts

Direct link
… Do a right-click on the link above
and select “Copy Link”