Non-Encumbrance Covenant

Negative Pledge - A Negative Pledge is a covenant in a loan agreement where the borrower agrees not to pledge any assets as collateral if doing so would result in less security for the agreement's bondholders. This provision aims to protect the interests of the bondholders by ensuring that the borrower does not take actions that would dilute the security or increase the risk associated with the debt.

Class Information

JSON JSON-LD OWL XML Markdown

Identification

Label (rdfs)
Negative Pledge
Preferred Label
Non-Encumbrance Covenant
Alternative Labels
Covenant Against Encumbrances, No-Pledge Agreement
Identifier
N/A

Definition and Examples

Definition
A Negative Pledge is a covenant in a loan agreement where the borrower agrees not to pledge any assets as collateral if doing so would result in less security for the agreement's bondholders. This provision aims to protect the interests of the bondholders by ensuring that the borrower does not take actions that would dilute the security or increase the risk associated with the debt.
Examples
  • N/A

Translations

N/A

Class Relationships

Sub Class Of
Parent Class Of
  • N/A
Is Defined By
N/A
See Also
N/A

Additional Information

Comment
N/A
Description
N/A
Notes
  • N/A
Deprecated
False

Metadata

History Note
N/A
Editorial Note
N/A
In Scheme
N/A
Source
N/A
Country
N/A

Graph