Abbreviated Cash Tender Offer Press Release
(Debt Securities)

Summary

This press release template may be used to announce a cash tender offer for debt securities pursuant to an abbreviated process approved by the Securities and Exchange Commission (SEC). This template includes practical guidance, drafting notes, and alternate and optional clauses. 2015 No-Action Letter In January 2015, the SEC issued a no-action letter (the 2015 No-Action Letter) permitting certain tender offers for non-convertible debt securities to be held open for an abbreviated period. Generally, under Exchange Act Rule 14e-1(a) (17 C.F.R. § 240.14e-1), a tender offer must be kept open for a minimum of 20 business days. Further, under Exchange Act Rule 14e-1(b), any change in consideration, percentage of securities being sought, or dealer solicitation fee requires the tender offer to remain open for at least 10 business days' from the date notice is provided of such action. The 2015 No-Action Letter allows tender offers for non-convertible debt (that meet certain other conditions) to be held open for only five business days from and including the date the tender offer is first published, with an additional five business days for any change in consideration and an additional three business days for any other material change. Such tender offers may be referred to as abbreviated tender offers. Conditions for Abbreviated Tender Offer For a tender offer to qualify for the abbreviated tender offer periods: • The offer must be for any and all non-convertible debt securities of a particular class or series. • The issuer of the debt securities must make the offer (or its wholly owned subsidiary or a parent company of which the issuer is a wholly owned subsidiary). • Consideration must be in cash (either a fixed amount or calculated based on a fixed spread) and/or qualified debt securities (as defined in the 2015 No-Action Letter and subject to conditions therein, including that qualified debt securities are offered only to Qualified Institutional Buyers (QIBs) and non-U.S. persons). • All record and beneficial holders of the debt securities must be entitled to participate. • The offer must permit tenders prior to the expiration through a guaranteed delivery procedure that would guarantee delivery of the securities no later than the close of business on the second business day after the offer expires. Restrictions on Abbreviated Tender Offer An abbreviated tender offer may not include or involve any of the following: • A consent solicitation • A default or event of default under the indenture governing the debt securities or any other indenture or material credit agreement to which the issuer is a party • An issuer in bankruptcy or insolvency proceedings, or who has commenced a consent solicitation for a pre-packaged bankruptcy proceeding, or whose board of directors has authorized discussions with the issuer's creditors for a consensual restructuring of the issuer's outstanding indebtedness • Financing of the tender offer from the proceeds of any senior indebtedness An abbreviated tender offer also cannot be launched within 10 business days after the public announcement or consummation of the purchase, sale, or transfer by the issuer or any of its subsidiaries of a material business or amount of assets. There are further restrictions on an abbreviated tender offer with respect to changes of control, third party tender offers, and other issuer tender offers. 2016 SEC Compliance and Disclosure Interpretations (C&DIs) on Abbreviated Tender Offers On November 18, 2016, the SEC issued five C&DIs clarifying certain aspects of abbreviated tender offers. The C&DIs state that: • A foreign private issuer may satisfy the requirement to file the press release announcing an abbreviated tender offer before noon on the first day of the offer (as further discussed in the Drafting Note to the first paragraph of the press release) by filing a Form 6-K instead of a Form 8-K. See C&DI 162.01. • Abbreviated tender offers may include a minimum tender condition, even though they must be for any and all of the debt securities. See C&DI 162.02. • The amount of cash to be paid in an abbreviated tender offer to persons other than QIBs and non-U.S. persons can be calculated with reference to a fixed spread to a benchmark, provided that the calculation is the same as used in determining the amount of qualified debt securities to be offered as consideration to QIBs and non-U.S. persons. See C&DI 162.03. • Abbreviated tender offers that are exchange offers may qualify for exemption from registration under Section 3(a)(9) (15 U.S.C.S. § 77c) of the Securities Act of 1933, as amended (Securities Act), as well as under Section 4(a)(2) (15 U.S.C.S. § 77d) of the Securities Act or Rule 144A (17 C.F.R. § 230.144a). See C&DI 162.04. • An abbreviated tender offer may be announced at any time on the 10th business day after announcement of a material sale, purchase, or transfer of assets, but should not be commenced until 5:01 p.m. Eastern time on that day. See C&DI 162.05. For further information on debt tender offers, see Debt Tender Offer Structuring Considerations, Debt Tender Offers, Debt Securities Restructuring Options, U.S. Securities Laws Applicable to Debt Exchange Offers and Cash Tender Offers Chart, Debt Tender Offers​: Offer to Purchase, Debt Tender Offers: Letter of Transmittal, and Debt Tender Offers: Legal Opinions and Agent Agreements.