Negative pledge undertaking

This guidance note will specifically examine the undertaking prohibiting the creation of security which is often referred to as the negative pledge. The negative pledge provides that, with some exceptions, the borrower may not create or permit to subsist security or quasi-security over its assets in favour of a third party. This guidance note also covers the restriction on the borrower’s ability to make asset disposals typically included in facility agreements.

See Negative pledge undertaking.