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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A harmful externality; that is, a harmful effect of one economic agent's actions on another. Considered a distortion because the first agent has inadequate incentive to curtail their action. Examples are pollution from factories (a production externality) and smoke from cigarettes (a consumption externality).


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N Negative Amortization

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A condition created when a loan payment is less than interest alone. Even though payments are made on time, the amount owing increases.


Further Suggestions

Negative covenant
Negative cash flow
Negative yield curve
negative equity
Negative list
Negative duration
Negative convexity
Negative amortization


 
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