Many negative pledge clauses contain exceptions for new borrowing under existing bank loans and borrowing at the subsidiary level. What risks do these exceptions present to the bondholder?

Corporate Finance, Third Edition

Stephen J. Lubben

A. Valuing Bonds pg.67 Corporate Bond Sales Top $237 Billion in Record August pg.67 1. Types of Bonds pg.68 2. Bond Pricing and the Price/Yield Relationship pg.70 3. Bond Ratings pg.72 S&P Ratings Debate Doesn't Show Fraud, Peterson Says pg.72 B. Bond Indentures pg.74 Marcel Kahan, Rethinking Corporate Bonds: The Trade-Off Between Individual and Collective Rights pg.75 1. The Trust Indenture Act pg.76 In the Matter of J.P. Morgan&Co. Incorporated File No. 25-1 Securities and Exchange Commission pg.76 2. Call Provisions and Other Covenants pg.82 Best Buy Poison Put Elusive in Schulze Offer: Corporate Finance pg.83 C. Syndicated Loan Agreements pg.86 1. Loan Structures pg.86 Deutsche Bank AG, Plaintiff-Counterclaim-Defendant, v. JPMORGAN Chase Bank (F/K/A The Chase Manhattan Bank), Defendant-Counterclaim-Plaintiff pg.87 In Re Fontainebleau Las Vegas Holdings, LLC, et al., Debtors. Fontainebleau Las Vegas, LLC, Plaintiff, v. Bank of America, N.A., et al., Defendants pg.89 2. Decision Making pg.91 Participation Agreement pg.91 In Re Chrysler LLC, et al., Debtors pg.93 Unreported Disposition 29 Misc.3d 1216(A), 918 N.Y.S.2d 396 (Table), 2010 WL 4243437 (N.Y. Sup.), 2010 N.Y. Slip Op. 51848(U) Bank of Am., N.A. v. PSW NYC LLC pg.98