Alert February 15, 2011

SEC Proposes Condition Regarding Prior Issuances to Replace Investment Grade Credit Rating Requirement in Determining Form S-3 and Form F-3 Eligibility

In accordance with a mandate in the Dodd-Frank Act requiring federal agencies to review the use of credit ratings in their regulations and remove them as appropriate, the SEC issued a proposal that would remove the condition for use of Forms S-3 and F-3 for offerings of non-convertible securities that currently requires an issue to have an NRSRO investment grade rating, and substitute a test tied to the amount of debt and other non-convertible securities issued in the prior three years.  Comments on the proposal must be received by March 28, 2011.