SEC Okays Five-Day Period for Certain Tender Offers
Typically, a public offer to purchase a substantial amount of a company’s debt or equity securities must remain open for 20 business days, in order to allow holders sufficient time to make an informed decision to participate. An exception has existed for certain tender offers for investment-grade debt securities, allowing an abbreviated period of 7-10 calendar days in some circumstances. Expanding the exception, the SEC recently granted no-action relief to allow a tender offer period of five business days for both investment grade and non-investment grade debt securities (i.e., high-yield debt). The shortened period, which would facilitate debt refinancings, is available so long as the offer meets certain criteria, including being made by the issuer (or a parent or subsidiary), being open to all of a series of non-convertible debt securities, being made in exchange for only cash or qualified debt securities, and not being made as part of a consent solicitation to amend or terminate the governing indenture or in conjunction with certain disqualifying circumstances. In addition, the issuer must disseminate its offer notice widely and provide investors with immediate access to the offering materials. Read the SEC no-action letter.