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Negative covenant |
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Negative covenantA bond covenant that limits or prohibits certain actions unless the bondholders agree.Negative covenant Similar MatchesNegative durationNegative durationOccurs when the price of an MBS moves in the same direction as interest rates. Negative equityNegative equityA situation where the purchaser of a property has taken out a mortgage and some time after the purchase, the value of the property falls below the mortgage amount. For example:Purchase price of property: £80,000Deposit: £10,000Mortgage: £70,000If the value of the property falls below £70,000, the mortgage holder has negative equity in the property. N Negative AmortizationN Negative AmortizationA condition created when a loan payment is less than interest alone. Even though payments are made on time, the amount owing increases. Negative amortizationNegative amortizationA loan repayment schedule in which the outstanding principal balance of the loan increases, rather than amortizing, because the scheduled monthly payments do not cover the full amount required to amortize the loan. The unpaid interest is added to the outstanding principal, to be repaid later. Negative convexityNegative convexityA bond characteristic such that the price appreciation will be less than the price depreciation for a large change in yield of a given number of basis points. For example, a fixed-rate mortgage may lose value as rates go down because of prepayments. Further SuggestionsNegative income taxNegative list Negative working capital Negative externality Negative yield curve Negative cash flow Negative pledge clause Negative NPV tie in project |
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