Fixed Income

Negative Covenant

Definition

What is Negative Covenant?

A covenant restricting the borrower from specified actions.

Example in practice

The company may not pledge key assets without bondholder consent.

Keep learning

A debt security through which an investor lends money to an issuer in return for promised payments.

The government, company, or organisation that creates and sells a security.

The principal amount stated on a bond and usually repaid at maturity.

A short-term government debt instrument usually issued at a discount and repaid at face value.

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