After Acquired Clause -- Provision in an agreement of mortgage that supplementary property coming into the borrowerfs hands after the conclusion of a mortgage will become added guarantee for the mortgage.
By thus preventing additional first mortgages, this type of clause can confer a favorable rating on mortgage bonds and enable the issuer to take loans at easy rates. However, it may also create impediments in the funding of growth through fresh borrowings. As a result, a number of tactics are usually employed to get rid of after acquired clauses, e.g. modifications in indenture contracts and repurchase or swapping of bonds.
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