SEC Significantly Expands Five-Business-Day Relief for Non-Convertible Debt Tender and Exchange Offers

On June 30, 2026, the SEC’s Division of Corporation Finance issued an exemptive order, effective immediately, permitting issuer self-tender and exchange offers for non-convertible debt securities to remain open for an abbreviated, five-business-day offering period. The exemptive order supersedes the Division’s previous January 23, 2015 no-action letter, which anchored abbreviated debt tender offer market practice for more than a decade. Similar to the objective of the April 16, 2026 exemptive order shortening the minimum offer period for qualifying equity tender offers to 10 business days, the exemptive order is intended to “address market inefficiencies, better reflect technological advancements, reduce exposure to fluctuations in the market and in interest rates, and facilitate the availability of tender offers as debt management transactions.” The exemptive order builds on, and significantly expands, the 2015 no-action letter, providing issuers with additional flexibility when undertaking liability management transactions and managing market risk.

As compared to the 2015 no-action letter, the exemptive order:

• Permits partial tender and exchange offers, provided that (i) the securities are accepted on a pro rata basis and (ii) any decrease, or an increase of more than two percent, in the amount of securities subject to the offer must be announced by 9:00 a.m., Eastern time, on the third business day prior to expiration.
• Permits offers in connection with consent solicitations, provided the amendment does not require the consent of more than a simple majority of the outstanding principal amount of subject securities.
• Eliminates the existing guaranteed delivery requirement.
• Eliminates the existing prohibition on financing offers with the proceeds of “Senior Indebtedness.”[1]
• Permits the exact consideration and interest rates on Qualified Debt Securities (QDS) to be fixed no later than offer expiration time, rather than 2:00 p.m., Eastern time, on the last business day of the offer.
• Permits exchange offers to include institutions that are accredited investors, as defined in Securities Act Rule 163B(c)(2), in addition to qualified institutional buyers (QIBs) and non-U.S. persons, and no longer requires issuers to extend a concurrent cash option payment to non-eligible holders.
• Eliminates the requirement for SEC-reporting issuers to furnish the launch press release or notices of change in consideration on Form 8-K (or, by SEC staff practice under Rule 14e-1 CFI 162.01, Form 6-K).
• Shortens the notice period of (i) any change in consideration from five business days to no later than 9:00 a.m., Eastern time, on the third business day before expiration and (ii) other material changes from three business days to no later than 9:00 a.m., Eastern time, on the second business day before expiration.

Appendix A to this alert reconciles the differences in relief available under the exemptive order as compared to the 2015 no-action letter.

Key Takeaways

• The elimination of the “any-and-all” requirement will increase issuer flexibility, as issuers that did not wish to extend an offer to an entire tranche were previously required to either (i) extend the offer over a 20-business-day period, usually combined with an early tender premium after 10 business days, or (ii) conduct abbreviated “knock out” offers each targeting all of a specified tranche with an overall maximum tender cap. The requirement that any decrease, or an increase of more than two percent, in the amount of subject securities be announced no later than three business days prior to expiration, however, may extend certain partial tender offers to eight-day offers if the issuer decides at the end of the initial offer period to increase the amount of securities subject to the offer. 
• The elimination of guaranteed delivery requirements will reduce costs and delays caused by a rarely used mechanism with a significant fail-to-deliver rate (i.e., only a small percentage of holders that provide notice of guaranteed delivery actually deliver their securities for extended settlement), which under the previous framework resulted in uncertainty as to the precise amount of securities tendered at expiration.
• Permitting offers to be conducted in connection with consent solicitations that require no more than a simple majority of the outstanding principal amount of the subject securities will expand issuer flexibility in liability management transactions where a partial or targeted covenant strip may be used to incentivize participation, while retaining the existing 10/20-business-day framework for amendments that require the consent of a greater majority of holders.
• For exchange offers, permitting QDS to be “substantially similar” (rather than identical) in all material respects to either the subject securities or the issuer’s most recent pari passu debt issuance addresses a practical issue in the application of the previous five-day framework if the prevailing covenants in the issuer’s debt differ from the terms of the debt subject to the offer, which can occur if the issuer’s covenant package evolves over time or if the debt subject to the tender offer has previously been modified through a consent solicitation.
• The elimination of the parallel cash offer requirement will streamline offering processes and expand issuer flexibility in managing their balance sheets through liability management exercises involving exchange offers, together with the ability to capture a wider audience in the exchange offer by extending it to institutional accredited investors in addition to QIBs and non-U.S. persons.
• The SEC did not take the opportunity to (i) more broadly shorten offer periods for issuer self-tenders and exchange offers from 20 to 10 business days to reflect advances in communication and other technology, which could have replaced widely used 10/10-day early tender premium structures, (ii) more broadly shorten notice periods for material changes, which would have provided issuers with even more flexibility to respond to investor demand or market dynamics, or (iii) specify that notice is not required when the upsizing of an offer results only in purchases of previously tendered securities. Consideration should be given to these and other related questions, including the treatment of equity securities that trade in the fixed-income markets and certain contingent convertible securities such as regulatory capital.
• The exemptive order establishes an exemption to Rule 14e-1 and as such provides greater legal certainty than the 2015 staff no-action position, which we expect will be reflected as an opinion practice matter in Rule 14e-1 legal opinions given on transactions designed to come within the exemption.

Appendix A: Comparison of 2015 No-Action Letter vs. 2026 Exemptive Order