Negative pledge is a provision in a contract which prohibits a party to the contract from creating any security interests over certain property specified in the provision.
In Australia, negative pledge lending took off after a substantial deal by Pioneer Concrete in 1978.
Negative pledge clauses are almost universal in modern unsecured commercial loan documents.
If the borrower could do this, the original lender would be disadvantaged because the subsequent lender would have first call on the assets in an event of default.
The World Bank's negative pledge clause prohibits borrowing countries from using public assets to pay other creditors before repaying the World Bank.