easy · Private Credit & Debt documentation-covenants-terms

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

1. It prevents the borrower from speaking negatively about the lender in public.
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 save on interest.
4. It mandates that the company's net income remains negative for tax purposes.

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