New SEC Exemptive Order Streamlines Tender and Exchange Offers for Non-Convertible Debt Securities (2026)

On June 30, 2026, the Office of Mergers and Acquisitions in the SEC’s Division of Corporation Finance issued an exemptive order permitting a tender or exchange offer for any class or series of non-convertible debt securities to remain open for a minimum offering period of five business days, rather than the 20-business-day minimum generally required under Rule 14e-1(a) of the Securities Exchange Act of 1934. The City Bar’s Securities Regulation Committee had submitted a letter recommending exemptive relief from the tender offer rules, and the order reflects several of the Committee’s recommendations.

What Changed

Beyond the shortened offering period, the order relaxes several conditions that had constrained abbreviated offers under the SEC’s 2015 no-action letter regarding Exchange Act Rule 14e-1.

1. Partial offers permitted: The offer may now be made for less than all of the class or series, with securities accepted pro rata by amount tendered; the 2015 letter required an any-and-all offer.
2. Consent solicitations permitted: The offer may include a consent solicitation, so long as the proposed indenture amendment requires no more than a simple majority; the 2015 letter barred consent solicitations.
3. Change-of-control transactions: The offer may accompany a change of control or other extraordinary transaction, provided it does not commence within ten business days of that transaction’s announcement or consummation; the 2015 letter prohibited such offers.
4. No restriction on cash source: The cash consideration is no longer subject to source restrictions; the 2015 letter barred financing with the proceeds of senior indebtedness.
5. Expanded Qualified Debt Securities: In an exchange offer, the consideration may consist of Qualified Debt Securities substantially similar to either the subject securities or the issuer’s most recent pari passu issuance (except for maturity, interest and record dates, redemption provisions, and interest rate, with all interest payable in cash); the 2015 letter required similarity to the subject securities themselves.

What the City Bar Recommended

In its letter, the Securities Regulation Committee urged the Commission to formalize the abbreviated framework that, since 2015, had been available only through staff no-action relief. The order adopts several of the Committee’s recommendations, including permitting partial offers, allowing certain consent solicitations, accommodating change-of-control transactions, removing restrictions on the source of cash consideration, and expanding the range of Qualified Debt Securities that may be offered in an exchange.

Why It Matters

By granting a formal exemption from Rule 14e-1(a) and (b) and superseding the 2015 no-action letter, the order gives issuers and market participants greater certainty in structuring abbreviated debt tender and exchange offers. Committee Chair Christian O. Nagler noted that it enables issuers to complete routine debt management transactions more efficiently while reducing exposure to market and interest-rate fluctuations during the offering period.

The full committee letter is available here for readers who wish to review it in detail.