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restrictive covenant
(redirected from Negative Covenants)

   Also found in: Dictionary/thesaurus, Medical, Legal, Encyclopedia, Wikipedia 0.01 sec.
Restrictive Covenant
A bond covenant that forbids the issuer from taking certain actions. For example, a restrictive covenant may prevent an issuer from issuing more debt until the bond matures. More commonly, a restrictive covenant limits the dividends an issuer may pay to shareholders so as to reduce the risk to the bond. It contrasts with a positive covenant, which requires the issuer to take certain enumerated actions. It is also called a negative covenant.

restrictive covenant
See covenant.

restrictive covenant
A deed restriction. See covenant.


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In addition, the Facility contains customary negative covenants applicable to the Company and its subsidiaries, including negative covenants that restrict the ability of such entities to, among other things, (i) incur additional indebtedness, (ii) allow certain liens to attach to such entities' assets, and (iii) pay dividends or make certain other restricted payments.
People think compliance is mostly financials compliance and a couple of very big negatives," says Jim Simpson, managing partner of Corporate Finance Solutions, citing negative covenants such as restrictions on asset sales or mergers.
The facility contains customary representations and warranties, and affirmative and negative covenants.
 
 
 
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