easy · Debt Capital Markets bond-instruments-structures

Which of the following describes a 'negative pledge' covenant in an investment-grade bond indenture?

1. The issuer must keep its consolidated net leverage ratio below 3.0x as a financial maintenance test at all times.
2. The issuer cannot grant a lien on its assets to other creditors without providing equal security to the current bondholders.
3. The issuer is strictly barred from incurring any further debt of any kind until each of its outstanding bonds has finally matured.
4. The issuer may not pay any dividends to its common shareholders during any fiscal period in which its reported net income is negative.

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