Springing lien

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Springing lien /ˈsprɪnʤɪŋ/ /lɪən/ (n.)

A security interest that takes everyone by surprise. A lien on a debtor’s property that kicks in should a pre-defined event happen. For example, a loan may include a springing lien that requires the borrower to pledge its assets to secure the loan if the borrower's credit rating is downgraded. Compare with a floating charge.

See also

• Strange negotiation
• Security interest