On June 30, 2026, the SEC’s Division of Corporation Finance published an exemptive order (the “Debt Order”) permitting tender offers for non-convertible debt securities with a minimum offering period of five business days (a “Five Business Day Tender Offer”) if they meet certain criteria. The Debt Order reflects the Staff’s position that the requirement under Rule 14e-1(a) that tender offers remain open for 20 business days is not appropriate in all circumstances, given the dynamics of the debt capital markets and technological advancements, and supplants the no-action relief provided by the Division in its 2015 no-action letter (the “2015 No-Action Letter”).
The Debt Order expands the criteria under which a Five Business Day Tender Offer may be conducted as compared to the 2015 No-Action Letter in several critical ways, including, among other things, by permitting Five Business Day Tender Offers to be:
- Combined with consent solicitations, provided the consent of no more than a majority of the outstanding principal amount of the subject securities is required for the amendments;
- Financed with the proceeds of debt offerings senior to the subject securities;
- Structured as partial tenders, subject to proration (rather than “any and all” tenders); and
- Conducted in connection with a change-of-control transaction, so long as the offer is not commenced within ten business days following the announcement or consummation, which may facilitate the use of Five Business Day Tender Offers in the M&A context.
However, issuers that are distressed or considering liability management transactions should be mindful of certain of the Debt Order’s requirements. For instance, a Five Business Day Tender Offer may not be conducted if the board of directors “has authorized discussions with the issuer’s creditors to effect a consensual restructuring of the issuer’s outstanding indebtedness.” In addition, while the limitations on the “Qualified Debt Securities” that may be offered in exchange for the subject securities have been loosened, such securities must (i) have the same issuer, guarantors and lien priority as those of the subject securities (or the most recent issuance of pari passu debt securities), and (ii) be cash-pay only, thereby limiting structuring flexibility, particularly for distressed issuers.
Overall, the Debt Order is an important development in the SEC’s ongoing project to streamline and modernize federal securities regulation and should provide meaningful additional flexibility for issuers. This is in line with the SEC’s recent exemptive order permitting 10-day all-cash equity tender offers in certain circumstances, as well as its proposed rules related to registered offering and filer status reforms.
This post is based on a Wachtell, Lipton, Rosen & Katz memorandum, “SEC Expands Five Business Day Debt Tender Offer Criteria,” dated July 6, 2026.