The limitations within a bond indenture agreement that prohibit certain actions by a ﬁrm are called:l

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Negative covenants are restrictions within a bond indenture agreement that prohibit certain actions by a firm, such as issuing additional debt or disposing of assets without permission from bondholders. Sinking fund provisions require firms to set aside money periodically to retire their debt, debenture provisions refer to a particular type of bond, call provisions allow the issuer to redeem the bond before maturity, and seniority requirements determine the priority of payment in the event of default.

The Limitations Within a Bond Indenture Agreement That Prohibit Certain