Define: Negative Pledge

UK Accounting Glossary

Definition: Negative Pledge


Quick Summary of Negative Pledge


A Negative pledge is a provision in a contract which prohibits a party to the contract from creating any security interests over certain property specified in the provision.



What is the dictionary definition of Negative Pledge?

Dictionary Definition


This is a covenant in a loan agreement in which a borrower promises that no secured borrowings are to be made during the lifetime of the loan or that they will ensure that the loan is secured equally and rate-ably with any new borrowings as explicitly defined.


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Full Definition of Negative Pledge


A type of loan or loan condition in which the borrower agrees with the lender not to allow any other lender or creditor to rank ahead for payment in the event of a liquidation. Such a loan is unsecured (ie. not backed by a charge over specific assets).


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Negative Pledge FAQ's



Cite Term


To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
https://payrollheaven.com/define/negative-pledge/
Modern Language Association (MLA):
Negative Pledge. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. September 16, 2019 https://payrollheaven.com/define/negative-pledge/.
Chicago Manual of Style (CMS):
Negative Pledge. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/negative-pledge/ (accessed: September 16, 2019).
American Psychological Association (APA):
Negative Pledge. PayrollHeaven.com. Retrieved September 16, 2019, from PayrollHeaven.com website: https://payrollheaven.com/define/negative-pledge/

Definition Sources


Definitions for Negative Pledge are sourced/syndicated from:


This glossary post was last updated: 27th January 2019.