Negative pledge clause


 

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Negative pledge clause

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.



Negative pledge clause

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Negative list

Negative list

In an international agreement, a list of those items, entities, products, etc. to which the agreement will not apply, the commitment being to apply the agreement to everything else. Contrasts with positive list.


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Negative covenant

A bond covenant that limits or prohibits certain actions unless the bondholders agree.


Negative duration

Negative duration

Occurs when the price of an MBS moves in the same direction as interest rates.


Negative convexity

Negative convexity

A 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.


Negative working capital

Negative working capital

Occurs when current liabilities exceed current assets, which can lead to bankruptcy.


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