Negative Pledge Clauses In Loan Agreements

Date Held: November 28, 2012

Start Time: 1:00 PM ET

End Time: 2:30 PM ET

Credits: CLE (Please check the Detailed Credit Information page for states that have already been approved), CPE, Additional credit may be available upon request. Contact Lorman at 866-352-9540 for further information.

Negative pledge clauses, i.e., clauses that restrict a borrower from granting a security interest in, or permitting a lien, on the borrower’s assets in favor of a third party, are common in loan agreements. Yet there has not been much commentary on the purpose, nature and effect of these clauses so critical to the decision of a lender to extend credit to a borrower.

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