limitation on sale-and-leaseback


A bond covenant that prohibits the issuer from entering sale-and-leaseback transactions. A sale-and-leaseback transaction is where the firm sells a fixed asset and the purchaser rents it back to the selling company. This stipulation is provided for in the bond since a sale-and-leaseback transaction increases the bond's risk.
Browse Definitions by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
limitation on merger, consolidation, or sale limitation on subsidiary borrowing