The Law Dictionary

Your Free Online Legal Dictionary • Featuring Black’s Law Dictionary, 2nd Ed.

NEGATIVE PLEDGE Definition & Legal Meaning

Definition & Citations:

Unsecured loan agreement’ provision requiring the borrower to get the current lender’s consent before obtaining any secured loan. An example is a bond indenture clause prohibiting the bond issuer from pledging these assets to a third party as it reduces the security level for the bondholders.

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