easy · Private Credit documentation-covenants-terms

The 'Negative Pledge' clause in a Credit Agreement serves what purpose?

1. It prevents the borrower from making disparaging public statements about the lender.
2. It prohibits the borrower from granting security interests in its assets to other creditors.
3. It requires the borrower to maintain a negative cash balance to reduce interest costs.
4. It mandates that the borrowing company's reported net income remains negative for tax purposes.

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