Security & Collateral · glossary
The Company's promise in clause 6.1 to give nobody else security over its assets, except Permitted Security. Form MR01 shows the promise on the public register. A breach fixes the floating charge over that asset automatically (clause 4.2(a)). Debenture §6.1 · Debenture §4.2 · Chapter 7
Explained in Chapter 7, The Guarantor, the Group and the Negative Pledge, of Security & Collateral.
The main page for this term is Negative pledge, in Finance Deals & Syndicated Lending.
The Debenture gives the Bank security over everything the Company owns. Clause 6.1 then makes the Company promise to give nobody else any security. That promise is a negative pledge. The Bank wanted it with no exceptions, but a lender that already holds everything still has four reasons to fear a rival…Read Chapter 7, The Guarantor, the Group and the Negative Pledge →
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