SEC Issues Exemptive Order Expanding Availability of Five Business Day Tender, Exchange Offers for Nonconvertible Debt Securities

On June 30, 2026, the SEC’s Division of Corporation Finance issued an exemptive order (Order) substantially expanding the availability of abbreviated tender and exchange offers for nonconvertible debt securities. The Order replaces decades of no-action relief with a formal exemptive framework and expanded this relief to noninvestment grade securities.

Key takeaways:

• Five-business-day debt tender and exchange offers are now available pursuant to a formal SEC exemptive order rather than staff no-action relief.
• The Order applies to all nonconvertible debt securities regardless of rating, opening up the abbreviated timeline to exchanges and tenders of noninvestment-grade securities.
• The Order applies to capped as well as uncapped offers made solely for cash and/or nonconvertible non-payment-in-kind debt securities that are substantially similar in all material respects to either (i) the debt securities that are the subject of the tender offer or (2) the most recent issuance of pari passu debt securities by that issuer (Qualified Debt Securities).
• Exchange offers remain limited to qualified institutional buyers, accredited institutional investors, and non-U.S. persons when Qualified Debt Securities are offered in an exempt transaction.
• Any increase or decrease by more than 2% of the debt securities sought in the tender offer or any change in the consideration offered must be announced by 9 a.m. Eastern time on the third business day before the expiration date of the offer.
• Any other material change in the terms of the offer must be announced by 9 a.m. Eastern time on the second business day before the expiration date of the offer.
• Certain key limitations apply, including that the offer may not be made
  • in connection with consent solicitations where any amendment requires the consent of the holders of more than a simple majority of the outstanding principal amount of the subject securities;
  • when a default or event of default exists under a material credit agreement, including an indenture or trust deed;
  • when the issuer is the subject of a bankruptcy or insolvency proceeding;
  • within 10 business days of a change of control or similar extraordinary transaction, such as a merger, reorganization, or liquidation or a disposition of a material subsidiary that would require the furnishing of pro forma financial information;
  • in anticipation or in response to other tender offers for the issuer’s securities; or
  • concurrently with a tender offer for any other class of securities.

Companies should consider whether their existing securities would fall within the accelerated timeline, in particular those whose debt securities are noninvestment-grade and are trading at levels below par.