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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved