|
The Jolly Contrarian holds forth™
From our machine overlords
Here is what, NiGEL, our cheeky little GPT3 chatbot had to say when asked to explain:
A negative covenant is a promise made by the borrower to refrain from certain actions that could negatively affect its ability to repay the loan. These are restrictions placed on the borrower to help ensure continued creditworthiness such that the borrower can repay its loans to the lender.
For example, a negative covenant might prohibit the borrower from taking on additional debt, selling certain assets, or making certain changes to the business without the lender’s permission. The specific negative covenants will vary depending on the terms of the loan agreement.
If you are a british full-service commercial and investment bank, having a negative covenant buried in some long dated subordinated bond you issued ages ago but which doesn’t roll off for another five years is a real pisser.
Disclaimer: NiGEL’s a neural network, he drinks a lot, and he spends too much time on the internet, so if you listen to anything he has to say you only have yourself to blame.
Come to think of it, that is also true of the JC in general.
| Resources and Navigation
Index: Click ᐅ to expand:
|
|
Template:M intro repack negative covenant
Premium content
Here the free bit runs out. Subscribers click 👉 here. New readers sign up 👉 here and, for ½ a weekly 🍺 go full ninja about all these juicy topics 👇 |
Template:M premium summary repack negative covenant
See also
Template:M sa repack negative covenant
References
