Negative pledges

This guidance note further examines negative pledges, often being one of the most important undertakings in a facility agreement. It addresses the following:

• • why negative pledge clauses are used in commercial transactions;
• • the consequences of breaching negative pledge provisions;
• • how negative pledges are viewed in the context of security and quasi-security; and
• • key considerations when drafting a negative pledge clause.

See Negative pledges.