restrictive covenant

(redirected from Negative Covenants)
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Related to Negative Covenants: Affirmative Covenants

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.
References in periodicals archive ?
The credit facility is secured by Santarus' assets, excluding intellectual property, and contains affirmative and negative covenants, including certain financial covenants.
Additionally, the company said that the new facility includes a USD60m senior term loan and USD10m senior revolving credit facility which has a short-term variable interest rate plus a leverage-based margin, customary representations and warranties and affirmative and negative covenants.
The terms of the new facility are substantially similar to the Company's previous revolving credit facility and include a customary financial covenant governing total leverage as well as negative covenants limiting subsidiary indebtedness and certain other items typical for investment grade-rated borrowers.
The Agreement is now unsecured and subject to customary affirmative and negative covenants for credit agreements of this type.
The Amended Facility contains affirmative and negative covenants customary for a facility of this nature.
The credit facility contains customary affirmative and negative covenants, including limitations on debt, liens and restricted payments, as well as certain portfolio limitations and customary prepayment provisions, including a requirement to prepay loans or take certain other actions if certain asset value tests are not met.