In New Exemptive Order, SEC Expands Availability of Five Business Day Tender and Exchange Offers for Non-Convertible Debt Securities

On June 30, 2026, the Division of Corporation Finance (the “Division”) of the Securities and Exchange Commission (SEC) issued an exemptive order (the “Exemptive Order”) permitting tender or exchange offers for non-convertible debt securities to be held open for a minimum of five business days rather than the standard 20-business-day minimum otherwise required by Rule 14e-1(a) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), subject to the satisfaction of certain conditions. The Exemptive Order supersedes the Division’s January 23, 2015 no-action letter (the “2015 No-Action Letter”), which established a five-business-day regime for certain debt tender and exchange offers that satisfied specified conditions and had, itself, superseded earlier staff no-action letters dating to 1986 that provided for certain abbreviated tender offers for non-convertible debt securities. In addition to establishing a five-business-day regime, the 2015 No-Action Letter removed a prior distinction between investment grade and non-investment grade securities, and added new conditions, such as immediate widespread dissemination, a guaranteed delivery mechanism, and a Form 8-K filing requirement.

The Exemptive Order preserves much of the framework established by the 2015 No-Action Letter while introducing a series of meaningful expansions and simplifications that make the five-business-day offer regime available for more transactions and eliminate certain unduly burdensome conditions.

Importantly, whereas the 2015 No-Action Letter represented the SEC staff’s informal position that it would not recommend enforcement action against debt tender or exchange offers meeting its conditions, the Exemptive Order constitutes a formal legal exemption from Exchange Act Rules 14e-1(a) and (b) granted by the Division for the SEC pursuant to delegated authority, providing a stronger legal basis for reliance.

The Bottom Line

The Exemptive Order’s most important features and expansions relative to the 2015 No-Action Letter are:

• Partial offers now available. For the first time, issuers may conduct a Five Business Day Tender Offer for less than all of the outstanding class or series of subject debt securities, a significant expansion from the prior “any and all” securities requirement.
• Broader exchange offer eligibility. The pool of investors eligible to participate in qualified exchange offers has been expanded to include institutional accredited investors, in addition to qualified institutional buyers (QIBs) and non-U.S. persons.
• No cash alternative required for non-eligible holders. The requirement that non-eligible exchange offer participants be offered a concurrent cash alternative has been eliminated.
• Consent solicitations for simple majority amendments now permitted. The prohibition on concurrent consent solicitations has been narrowed to apply only where the proposed indenture amendment requires the consent of more than a simple majority of holders, enabling a broader range of combined tender offer/consent solicitation transactions.
• Expanded Qualified Debt Securities definition. The similarity standard for debt securities eligible as consideration for the subject debt securities (“Qualified Debt Securities”) has been relaxed from being “identical to” to being “substantially similar to,” the subject debt securities, and debt securities that are substantially similar to the issuer’s most recent issuance of debt securities that are pari passu with the subject debt securities may now qualify as Qualified Debt Securities. The weighted average life to maturity requirement for Qualified Debt Securities has also been eliminated.
• Guaranteed delivery procedure eliminated. Offers are no longer required to include a guaranteed delivery mechanism, simplifying offer mechanics.
• Senior Indebtedness financing prohibition eliminated. Offerors are no longer restricted in the sources of financing they may use to fund a Five Business Day Tender Offer.
• Form 8-K filing requirement eliminated. Reporting companies are no longer required to file the launch press release or consideration change announcements on Form 8-K as a condition of the relief.
• Bright-line extraordinary transaction blackout. The open-ended prohibition on offers made “in anticipation of” a change of control or extraordinary transaction has been replaced with a clear 10-business-day blackout period following public announcement or consummation of such a transaction.
• Updated benchmark rates. SOFR replaces LIBOR as an enumerated benchmark rate, reflecting current market practice.

Key Requirements of the Exemptive Order

To qualify as a “Five Business Day Tender Offer” under the Exemptive Order, a tender or exchange offer for any class or series of non-convertible debt securities must satisfy all of the following conditions.

Eligible Offerors

The offer must be made by the issuer of the subject non-convertible debt securities, a direct or indirect wholly owned subsidiary of the issuer, or a parent company that directly or indirectly owns 100% of the capital stock (other than directors’ qualifying shares) of the issuer. This eligibility requirement is unchanged from the 2015 No-Action Letter.

Subject Securities

Consistent with the requirements of the 2015 No-Action Letter, the offer may be made for any class or series of non-convertible debt securities, regardless of any particular credit rating assigned to those securities.

Eligible Consideration

The offer must be made solely for cash consideration and/or consideration consisting of Qualified Debt Securities. The Exemptive Order updates the definition of “Qualified Debt Securities” in two important respects relative to the 2015 No-Action Letter.

First, the Exemptive Order relaxes the similarity standard: Qualified Debt Securities must be substantially similar in all material respects (including as to issuer(s), guarantor(s), collateral, lien priority, covenants, and other terms) to either (i) the debt securities that are the subject of the tender offer or, notably, (ii) the most recent issuance of debt securities that are pari passu to the subject securities; the 2015 No-Action Letter required Qualified Debt Securities to be identical in all material respects to the subject securities themselves.

Second, the Exemptive Order eliminates the requirement in the 2015 No-Action Letter that Qualified Debt Securities have a weighted average life to maturity longer than the subject debt securities.

Qualified Debt Securities must in all events have all interest payable solely in cash. Consistent with the 2015 No-Action Letter, the consideration may be a fixed amount, or an amount based on a fixed spread to a benchmark (including U.S. Treasury Rates, SOFR, swap rates, or relevant foreign-currency equivalents). The Exemptive Order replaces LIBOR, which appeared in the 2015 No-Action Letter, with SOFR, reflecting the market transition away from LIBOR.

With respect to pricing deadlines, the exact amount of consideration on Qualified Debt Securities must be fixed no later than the expiration time of the offer, replacing the 2015 No-Action Letter’s requirement that consideration be fixed no later than 2:00 p.m., Eastern time, on the last business day of the offer.

Partial Offers Now Permitted; Pro-Ration Required

One of the most significant expansions in the Exemptive Order is the elimination of the requirement that the offer be made for any and all of the subject debt securities. The 2015 No-Action Letter conditioned relief on the offer being for 100% of the outstanding class or series, meaning that partial offers were not permissible under the prior regime. The Exemptive Order removes this restriction. Offers for less than all of the outstanding class or series of non-convertible debt securities are now permissible, subject to the condition that, if a greater amount of securities is tendered than the offeror is bound or willing to accept, the securities accepted must be taken up on a pro rata basis among tendering holders, disregarding fractions.

Given this new flexibility, the Exemptive Order adds a new proration-related condition requiring that if an offer is oversubscribed, the offeror must use commercially reasonable efforts to announce the proration factor by press release no later than 10:00 a.m., Eastern time, on the next business day after expiration (or as soon thereafter as practicable).

Eligible Exchange Offer Participants

Exchange offers continue to be restricted to sophisticated investors. The 2015 No-Action Letter limited eligible participants to Qualified Institutional Buyers (as defined under Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”)) and non-U.S. persons (within the meaning of Regulation S). The Exemptive Order modestly expands this category to also include institutions that are accredited investors within the meaning of Rule 163B(c)(2) under the Securities Act. The offer must be made in a transaction exempt from the registration requirements of the Securities Act.

Importantly, the 2015 No-Action Letter required that any holder who was not an eligible exchange offer participant be given a concurrent cash option—from either the offeror or a dealer manager—approximating the value of the Qualified Debt Securities, set at commencement of the offer. The Exemptive Order eliminates this cash alternative requirement entirely, presumably taking into account the expanded scope of eligible exchange offer participants and the fact that partial offers are now permitted. The implication of this, however, is that non-eligible exchange offer participants would be forced to continue holding their debt securities if the offeror decides not to conduct a concurrent cash offer.

Consent Solicitation Restriction Narrowed

Both the Exemptive Order and the 2015 No-Action Letter restrict concurrent consent solicitations, reflecting the concern that soliciting consents to amend the governing indenture in conjunction with a short-form tender offer could put holders under undue pressure to tender. However, the Exemptive Order significantly narrows this restriction. The 2015 No-Action Letter broadly prohibited any concurrent consent solicitation to amend the indenture. The Exemptive Order, however, prohibits only consent solicitations in which the proposed amendment requires the consent of holders of more than a simple majority of the outstanding principal amount of the subject securities. Consent solicitations requiring only a simple majority or a lesser threshold are now permissible alongside a Five Business Day Tender Offer.

No Default or Bankruptcy

The offer may not be made if a default or event of default exists under the governing indenture or any other indenture or material credit agreement to which the issuer is a party, and may not be made when the issuer is subject to bankruptcy or insolvency proceedings, has commenced a “pre-packaged” bankruptcy consent solicitation, or if the board of directors of the issuer has authorized discussions with creditors to effect a consensual restructuring of outstanding indebtedness. These conditions are unchanged from the 2015 No-Action Letter.

Announcement and Dissemination Requirements

The offer must be announced by a press release issued through a widely disseminated news or wire service by 10:00 a.m., Eastern time, on the date the offer commences. The press release must disclose the basic terms of the offer (identity of the offeror, class or series of securities, type and amount of consideration, and expiration date), pro-ration procedures (if applicable), and must contain an active hyperlink to a website where security holders can access the offer materials, letter of transmittal (if any), and other related documents. In addition, the offeror must use commercially reasonable efforts to send the press release via email or other electronic communication to all investors subscribing to corporate action email lists, use other customary methods to expedite dissemination to beneficial holders, and issue a press release promptly after consummation setting forth the results of the offer. These requirements are substantively consistent with those in the 2015 No-Action Letter.

Notably, the Exemptive Order eliminates the requirement in the 2015 No-Action Letter that Exchange Act reporting companies (including voluntary filers) file the launch press release (and any press release announcing a change in consideration) as a Current Report on Form 8-K.

Notice Requirements for Changes to the Offer

The Exemptive Order modifies the notice requirements applicable to changes in offer terms. Under the 2015 No-Action Letter, any change in the consideration required the offer to remain open for at least five business days following the announcement of that change, and any other material change required the offer to remain open for at least three business days. The Exemptive Order replaces these extension requirements with advance-announcement deadlines: any increase or decrease in the percentage of securities sought (other than the acceptance of up to an additional 2% of the class, a carve-out not present in the 2015 No-Action Letter) or any change in consideration must be communicated by press release no later than 9:00 a.m., Eastern time, on the third business day before expiration; any other material change must be communicated no later than 9:00 a.m., Eastern time, on the second business day before expiration. Critically, these announcement requirements do not require an automatic extension of the offer; they simply require that material changes be publicized with sufficient lead time before the existing scheduled expiration.

Withdrawal Rights

The Exemptive Order preserves the withdrawal rights framework from the 2015 No-Action Letter. Withdrawal rights must be exercisable at least until the earlier of (i) the expiration date of the offer or (ii) in the event the offer is extended, the 10th business day after commencement. In addition, if for any reason the offer has not been consummated within 60 business days after commencement, withdrawal rights must be available at any time after the 60th business day.

Prompt Payment

The offeror may not pay consideration until promptly after expiration of the offer, consistent with Exchange Act Rule 14e-1(c) and the 2015 No-Action Letter.

Guaranteed Delivery Procedure Eliminated

The 2015 No-Action Letter expressly required that offers permit tenders through a guaranteed delivery procedure, under which holders could certify beneficial ownership prior to expiration with actual delivery of securities required by the close of business on the second business day after expiration. This requirement, which reflected concerns about custodian bank processing timelines at the time, has been eliminated in the Exemptive Order, simplifying the mechanics of Five Business Day Tender Offers. In a January 2026 letter to the SEC, the Credit Roundtable, an association of fixed-income investors, had suggested that the requirement could be eliminated stating that, “[m]odern tender mechanics such as [The Depository Trust Company’s Automated Tender Offer Program (“ATOP”)] are available for the overwhelming majority of corporate bonds and establish beneficial ownership and intent to tender without the need for a delayed delivery procedure.”

Senior Indebtedness Financing Prohibition Eliminated

The 2015 No-Action Letter prohibited financing a Five Business Day Tender Offer with the proceeds of “Senior Indebtedness”—broadly defined as new indebtedness incurred to fund the offer that was structurally or contractually senior to, or had a shorter weighted average life than, the subject debt securities. This restriction was designed to prevent the offer from being financed in a manner that would disadvantage the holders of remaining subject securities. The Exemptive Order removes this restriction entirely, giving offerors substantially greater flexibility in selecting their financing sources.

Prohibited Transactions

The Exemptive Order retains the 2015 No-Action Letter’s general prohibition on offers made in anticipation of or in response to competing tender offers for the issuer’s securities, and on offers made concurrently with a tender offer for another class of the issuer’s securities if the effect of that offer would be to add obligors, guarantors, or collateral (or increase lien priority securing such other class).

The Exemptive Order, however, replaces the 2015 No-Action Letter’s open-ended prohibition on offers made “in anticipation of or in response to, or concurrently with” a change of control or other extraordinary transaction with a bright-line 10-business-day blackout period: the offer may not be commenced within 10 business days after the first public announcement or consummation of a change of control, merger, reorganization, liquidation, or sale of all or substantially all of the issuer’s consolidated assets. Similarly, a 10-business-day blackout period applies after the first public announcement or consummation of a purchase, sale, or transfer by the issuer or any subsidiary of a material business or assets that would require pro forma financial information under Article 11 of Regulation S-X. These bright-line standards replace the inherently fact-intensive and ambiguous “in anticipation of” formulation in the 2015 No-Action Letter.

Summary of Key Differences: Exemptive Order vs. 2015 No-Action Letter

Topic	2015 No-Action Letter	2026 Exemptive Order
Offer Scope	Must be for any and all of the subject debt securities	Partial offers permitted; pro-ration required if oversubscribed
Eligible Exchange Offer Participants	QIBs and non-U.S. persons only	QIBs, non-U.S. persons, and institutional accredited investors
Cash Alternative for Non-Eligible Exchange Offer Participants	Required: concurrent cash option must be offered to non-eligible holders	Eliminated
Consent Solicitation Restriction	Prohibited with respect to any amendment to the indenture	Prohibited only if amendment requires consent of holders of more than a simple majority of outstanding principal
Qualified Debt Securities (QDS) Similarity Standard	Must be identical in all material respects to the subject debt securities	Must be substantially similar in all material respects to the subject debt securities or the most recent pari passu issuance
QDS — Weighted Average Life Requirement	New QDS must have a longer weighted average life to maturity than the subject debt securities	No weighted average life requirement
Benchmark Rate	Includes LIBOR	SOFR replaces LIBOR
Consideration Pricing Deadline (QDS)	No later than 2:00 p.m. Eastern on the last business day of the offer	No later than the expiration time of the offer
Change in Consideration / Percentage Sought	Offer must remain open for 5 business days after announcement of change in consideration	Change must be announced by 9:00 a.m. Eastern on the 3rd business day before expiration (no automatic extension)
2% Additional Securities Carve-Out	Not applicable (any and all offers only)	Acceptance of up to 2% additional securities does not require advance announcement
Other Material Change Notice	Offer must remain open for 3 business days after announcement of material change	Change must be announced by 9:00 a.m. Eastern on the 2nd business day before expiration (no automatic extension)
Guaranteed Delivery Procedure	Required	Eliminated
Senior Indebtedness Financing	Prohibited	Not Prohibited
Form 8-K Filing Requirement	Reporting companies must file launch press release and consideration change announcements on Form 8-K	Eliminated
Extraordinary Transaction Restriction	Open-ended: offer may not be made “in anticipation of or in response to, or concurrently with” a change of control or extraordinary transaction	Bright-line: offer may not commence within 10 business days after first public announcement or consummation of a change of control or extraordinary transaction
Proration Announcement	Not applicable (any and all offers only)	Proration factor must be announced by 10:00 a.m. Eastern on the next business day after expiration (if offer is oversubscribed)