On 18 November 2016, the SEC published several new C&DIs seeking to clarify certain of the requirements that a debt tender or exchange offer must satisfy to fall under the scope of the SEC no-action letter regarding abbreviated debt tender offers and debt exchange offers for non- convertible securities, which was issued in January 2015.
A foreign private issuer may furnish a press release announcing the offer on a Form 6-K filed prior to 12:00 p.m. (Eastern time) on the first business day of the offer, rather than on Form 8-K, as specified in the no-action letter.
While abbreviated offers must be made for "any and all" of the debt securities subject to the offer, the offer may have minimum tender conditions.
The C&DIs provide additional guidance on the use of "qualified debt securities" as consideration in abbreviated offers and clarifies that abbreviated offers for cash consideration to all holders may be made for a fixed amount of cash or for an amount of cash calculated with reference to a fixed spread to a benchmark as of the last business day of the offer.
The guidance further specifies that a generic disclosure, such as "customary compensation", will normally not satisfy the requirement to provide a summary of all material terms of employment or other arrangement for compensation paid to all persons employed, retained or compensated to make solicitations or recommendations in connection with the relevant transaction.
The new guidance also provides further clarification on the conditions in the no-action letter applicable to abbreviated offers in connection with transactions, such as a purchase, sale or transfer by the issuer or any of its subsidiaries of a material business or amount of assets, that would trigger the requirement to furnish pro forma financial statements under Regulation S-X.
The new guidance is available at:
The SEC no-action letter relating to abbreviated offers is available at:
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