Negative Pledge

(redirected from Negative Pledges)

Negative Pledge

An agreement in which the borrower agrees not to pledge any of its assets as security and/or not to incur further indebtedness.

Negative Pledge

A negative covenant in a bond indenture in which the issuer agrees not to use any of its assets as security for another debt obligation or other liability if doing so would adversely impact the riskiness of the bond. This protects bondholders and also allows the issuer to pay a lower coupon rate.
Mentioned in ?
References in periodicals archive ?
Other negative pledges include restrictions to pay dividends and asset disposals.
The Facility is secured by a pledge of shares in Golden Star's significant subsidiaries and also provides for negative pledges on all other presently unsecured assets.