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Finance Dictionary and Glossary of Investment Terms
Negative Pledge Clause
A negative covenant in an indenture, it states that the corporation will not pledge any of its assets if doing so would give the lenders less security.
A bond covenant that requires the borrower to grant lenders a lien equivalent to any liens that may be granted in the future to any other currently unsecured lenders.
A covenant in a bond agreement whereby the borrower agrees not to pledge any assets if such pledging would result in less security for the agreement's bondholders. also called covenant of equal coverage.