Negative Pledge

A covenant that is the opposite of a Pledge – a promise not to Pledge property, generally money or other intangibles, to any party other than the Issuer, a Letter of Credit provider or other intended beneficiary of the Negative Pledge.  A Negative Pledge can be structured in Tax-Exempt Bond financings under a safe harbor in the Treasury Regulations to provide some security to a Letter of Credit provider without causing the Issuer’s or the Conduit Borrower’s money to become subject to the Arbitrage requirements under the Code.

Preparing Bonds

Learn about over various terms and concepts that may arise while preparing a bond issue.

In Contrast With


A promise to set aside, dedicate and use exclusively for specified purposes certain categories of property, generally money or other intangibles.

Hudson Yards Rail Yards

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Budget Reconciliation

A procedure used by the U.S. Congress to amend federal revenues and expenditures more easily than possible under normal order.