SEC Staff Issues Exemptive Order for Tender of Exchange Offers for Non-Convertible Debt

In April, the Office of Mergers and Acquisitions of the SEC’s Division of Corporation Finance issued an exemptive order providing issuers and, in some cases, third party bidders with the flexibility to shorten the time period during which tender offers for equity securities must be open from 20 to 10 business days.

On June 30, 2026, the Office of Mergers and Acquisitions revisited its existing relief for certain types of tender or exchange offers for non-convertible debt securities, expanding the availability of a five business day minimum offering period (rather than the 20 business day offering period contemplated by Exchange Act Rule 14e-1(a) or Rule 14e-1(b)) that had been previously established through a series of no-action letters.

The new exemptive order permits a tender or exchange offer for any class or series of non-convertible debt securities to remain open for a minimum period of five business days, so long as the following conditions are met:

• the offer is made by the issuer of the subject non-convertible debt securities, a direct or indirect wholly owned subsidiary, or a parent company owns 100% of the capital stock;
• the offer is made for a class or series of non-convertible debt securities, regardless of any particular rating assigned to such securities by any nationally recognized statistical rating organization;
• the offer is made solely for cash consideration and/or consideration consisting of “Qualified Debt Securities” as defined in the order;
• if the offer is for less than all of the outstanding class or series of non-convertible debt securities, and a greater amount of securities are tendered in the offer than the offeror is bound or willing to take up and pay for, the securities taken up and paid for shall be taken up and paid for as nearly as may be pro rata, disregarding fractions, according to the amount of securities tendered by each security holder during the offering period;
• if the offer is an exchange offer in which Qualified Debt Securities are offered, the offer is restricted to QIBs, “non-U.S. persons” within the meaning of Regulation S, and/or institutional accredited investors in a transaction exempt from the registration requirements of the Securities Act;
• the offer is not made in connection with a solicitation of consents to amend the indenture, form of security or note, or other agreement governing the subject non-convertible debt securities where such amendment requires the consent of the holders of more than a simple majority of the outstanding principal amount of the subject securities;
• the offer is not made when a default or event of default exists under the indenture or any other indenture or material credit agreement to which the issuer is a party;
• the offer is not made at a time when the issuer is the subject of bankruptcy or insolvency proceedings, or has commenced a solicitation of consents for a “pre-packaged” bankruptcy proceeding, or if the board of directors of the issuer has authorized discussions with the issuer’s creditors to effect a consensual restructuring of the issuer’s outstanding indebtedness;
• the offer is announced in a press release issued through a widely disseminated news or wire service, which includes the basic terms of the offer, the procedures for proration (if applicable), and contains an active hyperlink to a website address where security holders may access the tender offer materials, letter of transmittal (if any), and any other documents relating to the offer, by 10:00 a.m., Eastern time, on the date that the tender offer commences;
• any (i) increase or decrease in the percentage of the subject non-convertible debt securities sought in the tender offer, other than the acceptance for payment of an additional amount of securities not to exceed two percent of the class or series of securities that is the subject of the tender offer, calculated in accordance with Section 14(d)(3) of the Exchange Act, or (ii) change in the consideration offered, is communicated in each case by press release or other public announcement that is widely disseminated no later than 9:00 a.m., Eastern time, on the third business day before the expiration date of the offer;
• any other material change in the terms of the offer is communicated by press release or other public announcement that is widely disseminated no later than 9:00 a.m., Eastern time, on the second business day before the expiration date of the offer;
• the offer provides for withdrawal rights that are exercisable (i) at least until the earlier of (x) the expiration date of the offer and (y) in the event that the offer is extended, the tenth business day after commencement of the offer, and (ii) at any time after the 60th business day after commencement of the offer if, for any reason, the offer has not been consummated within 60 business days after commencement;
• if the offer is for less than all of the outstanding class or series of non-convertible debt securities, the offeror will use commercially reasonable efforts to announce the proration factor by press release or other public announcement that is widely disseminated by 10:00 a.m., Eastern time, on the next business day after the expiration date of the offer, or as soon thereafter as practicable;
• the offer provides that the offeror will not pay the consideration in the offer until promptly after expiration of the offer pursuant to Exchange Act Rule 14e-1(c); and
• the offer is not (i) commenced within ten business days after the first public announcement or the consummation of a change of control or other type of extraordinary transaction involving the issuer, such as a merger (or similar business combination), reorganization or liquidation, or a sale of all or substantially all of its consolidated assets; (ii) made in anticipation of or in response to other tender offers for the issuer’s securities; (iii) made concurrently with a tender offer for any other class or series of the issuer’s securities made by the issuer (or any subsidiary or parent company of the issuer) if the effect of such offer, if consummated (by way of amendment, exchange, or otherwise), would be to add obligors, guarantors, or collateral (or increase the priority of liens securing such other class or series); or (iv) commenced within ten business days after the first public announcement or the consummation of the purchase, sale, or transfer by the issuer or any of its subsidiaries of a material business or amount of assets that would require the furnishing of pro forma financial information with respect to such transaction pursuant to Article 11 of Regulation S-X (whether or not the issuer is a registrant under the Exchange Act).

This new exemptive order supersedes the Staff’s no-action letter Cahill Gordon & Reindel LLP (January 23, 2015) and any similar letters relating to abbreviated offering periods in tender or exchange offers for non-convertible debt securities.

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