# Negative Pledge

**IRI:** https://folio.openlegalstandard.org/RBhGgWIW35Tx2mB2TQPJAIE

## Labels

**Preferred Label:** Non-Encumbrance Covenant

**Alternative Labels:**

- Covenant Against Encumbrances
- No-Pledge Agreement

## 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.

## Sub Class Of

- https://folio.openlegalstandard.org/RfuC0yNDKhOWj8FHvjuYyg

## See Also

- https://folio.openlegalstandard.org/RBVPA78WQgUuu6qQ42WBD1D
- https://folio.openlegalstandard.org/RBwjfSdzaRLqTyzD43IzXmL
- https://folio.openlegalstandard.org/RD0r8VrjvX5kJXEu110odzx

**Deprecated:** False