SEC Issues Exemptive Order Expanding Five-Business-Day Relief for Tender and Exchange Offers for Non-Convertible Debt Securities

On June 30, 2026, the Office of Mergers and Acquisitions of the Division of Corporation Finance (the Division) of the U.S. Securities and Exchange Commission (SEC) issued an exemptive order (the Exemptive Order) expanding issuers’ ability to conduct abbreviated tender or exchange offers for non-convertible debt securities. Pursuant to the Securities Exchange Act of 1934 (Exchange Act) Rule 14e-1(a), tender offers must be open for at least 20 business days, which represents a significant burden for many issuers, particularly those conducting a tender offer as a liability management mechanism. The Exemptive Order, by further relaxing the abbreviated tender framework from existing guidance, is a major  industry development for debt issuers.

The Exemptive Order supersedes the division’s January 2015 no-action letter, which had governed the framework for abbreviated debt tender offers since its issuance over a decade ago. The 2015 no-action letter followed a series of other no-action letters dating back to 1986 enabling issuers to conduct abbreviated tenders without the threat of SEC enforcement action. Now, the Exemptive Order provides a formal legal exemption from Exchange Act Rules 14e-1(a) and (b) rather than informal no-action guidance.

Similar to the 2015 no-action letter, in order to qualify for the abbreviated five-business-day offering period, the offer must satisfy a series of conditions. However, the Exemptive Order loosens the conditions in a few notable ways, providing increased flexibility to issuers engaging in liability management transactions:

• Partial Tender Offers Allowed. The Exemptive Order omits the 2015 no-action letter’s prohibition on partial tender offers, enabling issuers to conduct partial tender offers on an abbreviated timeline so long as any over-accepted offers are settled on a pro rata basis according to the amount of securities tendered by each security holder during the offering period. Now, issuers can retire a portion of a tranche without conducting a full 20-business day offer.
• Certain Consent Solicitations Allowed. The Exemptive Order also eliminates the 2015 no-action letter’s blanket prohibition against concurrent consent solicitations, allowing issuers to conduct an abbreviated offer concurrent with a consent solicitation so long as only a simple majority consent is required to make the requested amendments. This change enables issuers to utilize a partial covenant strip as an inducement to tender, while the standard 20-business-day requirement continues to apply where amendments require supermajority consent.
• Broader Exchange Offer Eligibility. The 2015 no-action letter restricted exchange offers for Qualified Debt Securities to Qualified Institutional Buyers (QIBs)[1] and/or non-U.S. persons[2] and further required that holders who were not QIBs or non-U.S. persons be given a concurrent option to receive cash in exchange for their debt securities approximately equal in value to the Qualified Debt Securities being offered. The Exemptive Order instead enables institutional accredited investors[3] to participate in an exchange offer for Qualified Debt Securities and eliminates the requirement for a concurrent cash option to provide consideration to that category of investor. These changes widen the pool of investors eligible to participate in an abbreviated exchange offer, providing issuers additional flexibility in conducting such offers and allowing holders that are institutional accredited investors the opportunity to receive the new debt securities as opposed to only being able to sell their old securities for cash.
• Relaxed Definition of Qualified Debt Securities. The Exemptive Order loosens the definition by enabling securities that are substantially similar in all material respects to the issuer’s most recent issuance of pari passu debt to constitute Qualified Debt Securities rather than requiring the new debt to have identical terms as the subject debt. Furthermore, the new debt no longer needs a longer weighted average life to maturity than the subject debt. These revisions resolve difficulties that arose in practice while structuring exchanges, granting issuers increased flexibility in their liability management plans and accommodating issuers who want to keep up with market developments for their new series of debt securities.
• Incurrence of Senior Indebtedness Allowed. The Exemptive Order eliminates the 2015 no-action letter’s prohibition against financing the abbreviated tender or exchange offer with “Senior Indebtedness,”[4] again providing issuers additional flexibility to structure refinancings.
• Provides Certainty for Offers Near in Time to a Change of Control Transaction. The Exemptive Order clarifies that the offer cannot be made within 10 business days following the public announcement or commencement of a change of control or similar transaction, rather than the ambiguous “in anticipation of or in response to, or concurrently with” provided for in the 2015 no-action letter. This defined standard reduces interpretive uncertainty for issuers when planning the timing of liability management transactions.
• Streamlined Procedural Requirements. The Exemptive Order also makes certain procedural simplifications, reducing hurdles for issuers:
  • Loosening of Communications for Material Amendments. The Exemptive Order shortens the additional time the issuer must keep the offer open after communicating consideration-related changes in the terms of the offer (three business days as opposed to five) and non-consideration-related material changes in the terms of the offer (two business days as opposed to three).
  • No Form 8-K Requirement. While the Exemptive Order still requires wide dissemination of communications regarding the tender offer — including its commencement, the basic terms of the offer, proration procedures and subsequent proration factor, certain increases or decreases in the percentage of securities offered, or other material changes in the offer terms — the order generally allows communications to be made solely via press release or other public announcement that is widely disseminated, eliminating the 2015 no-action letter’s Form 8-K filing requirement of the launch press release (for registered issuers).
  • No Guaranteed Delivery Procedure Required. The Exemptive Order eliminates the requirement to offer a guaranteed delivery procedure, reducing the associated costs and uncertainties. However, issuers would still have the option to use such a mechanism if it is a helpful enticement for the holders of the targeted debt securities.
  • Pricing Flexibility. The exact consideration of Qualified Debt Securities in an exchange may be fixed no later than the expiration time of the offer, so long as a range was provided at commencement, rather than no later than 2:00 p.m. Eastern time on the last business day of the period. This provides additional flexibility to issuers but less certainty regarding consideration to participating holders. The Exemptive Order also replaces LIBOR with SOFR as an enumerated benchmark rate.

Taken together, the changes introduced by the Exemptive Order provide issuers a welcome and meaningful adjustment of the abbreviated tender offer framework for debt securities. By relaxing several conditions that had constrained issuer flexibility under the 2015 no-action letter, the division has brought the regulatory framework into closer alignment with the practical realities of modern liability management practice. The chart below provides a side-by-side comparison of the key provisions and conditions under the Exemptive Order and the 2015 no-action letter for easy visualization of the changes.

Summary of Key Changes