Guaranteeing social actions and membership rights (share pledge contracts) 2 Translations have been able to draw on examples spotted on the Internet. Mortgages sometimes contain negative deposit clauses. How can I resume my translations in the vocabulary coach? No translation could be found in the PONS dictionary. A collateral pledge agreement concluded by Commerce on December 31, 1981 by pawning 48,645 SLE common shares with a par value of $0.50 per share, Certificate 25 of December 31, 1981, accompanied by a letter dated December 31, 1981. A negative deposit clause also limits the likelihood that a particular asset will be mortgaged more than once, which prevents conflicts in which the lender is entitled to the asset when the borrower is late in payment. In this case, the clause prevents the borrower from using its own assets to secure other sources of financing. If the borrower insures other loans, the initial loan of the first institution will be less secure, given that the borrower now has a larger amount of debt obligations and the original institution may not have priority status for repayment. The negative mortgage clause reduces the risk to bondholders by limiting the activities in which the issuer may participate. Most of the time, this means that the issuer does not use the same assets to secure another debt commitment. When a financial institution grants an unsecured loan to a natural or legal person, it may include a negative deposit clause in the contract to protect itself.
In the case of real estate mortgages, many loan contracts contain terminology that prevents the borrower from using the mortgage property as collateral against a new loan, except in the event of refinancing. Do you want to add words, phrases or translations? Negative deposit clauses help bondholders protect their investments. When a bond withdrawal involves a negative deposit clause, it prevents the issuer from borrowing future debt securities that could jeopardize its ability to meet its obligations to existing bondholders. On the other hand, a violation of a negative deposit clause can result in a default, although a technical default. Lenders generally give an allotted time, z.B. 30 days, to correct a break before proceeding with the standard procedure. A negative deposit clause is a kind of negative confederation that prevents a borrower from pawning assets if it would endanger the lender`s security. This type of clause can be part of traditional borrowing and credit structures. Because a negative deposit clause enhances the security of a bond issue, it often allows issuers to borrow funds at a slightly lower rate. This lower interest rate benefits the issuer, creating a win-win situation for both issuers and the bondholder. All amounts held in the L/C issuer`s cash guarantee account are retained as collateral for the repayment of a subsequent L/C repayment obligation arising from the terms of the L/C agreement and the cash guarantee agreement.