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Limitation on Merger, Consolidation, or Sale
(redirected from Limitations on Merger, Consolidation or Sale)

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Limitation on merger, consolidation, or sale
A bond covenant that restricts in some way a firm's ability to merge or consolidate with another firm.

Limitation on Merger, Consolidation, or Sale
A negative covenant in some bond indentures restricting or prohibiting mergers and/or acquisitions while the bond remains outstanding. This clause is designed to protect bondholders from unexpected occurrences changing the credit rating or other aspects about the issuer. However, it limits the issuer's options should it find itself in a difficult situation.


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