Which of the Following Are Negative Covenants That Might Be

question 27

Multiple Choice

Which of the following are negative covenants that might be found in a bond indenture?
I.The company shall maintain a current ratio of 1.10 or better.
II.No debt senior to this issue can be issued.
III.The company cannot lease any major assets without approval by the lender.
IV.The company must maintain the loan collateral in good working order.

• A)I and II only
• B)II and III only
• C)III and IV only
• D)II, III, and IV only
• E)I, II, and III only