Closing Memorandum
(Non-Shelf Registered Debt Offerings)
Summary
This closing memorandum template (also called a memorandum of closing or closing agenda) may be used for an offering of debt securities registered with the Securities and Exchange Commission (SEC). This closing memorandum lists all major events and actions taken from the start to the close of the offering. This template includes practical guidance, drafting notes, and optional clauses. The closing memorandum is typically prepared by underwriters’ counsel and should be circulated to the working group at least a week prior to the closing date (though sometimes this is much earlier; for example, the parties may wish for all documents to be in agreed form upon pricing). The working group uses the draft as a template or to-do list for the activities through closing. In a debt offering, the documents to be delivered at closing generally track the closing conditions set forth in the underwriting agreement, as well as the indenture. Underwriters’ counsel and company counsel negotiate the substance of certificates or opinions to be delivered at closing (forms of which may be attached to the closing memorandum). This closing memorandum accounts for: • A follow-on public offering by a domestic company of debt securities (including additional language if the securities are convertible) • Registration of the securities on Form S-3 (or Form S-1) with the SEC • Possible listing of the securities (or underlying securities, if they are convertible) on the New York Stock Exchange or the NASDAQ Stock Market • Inclusion of an over-allotment option to purchase additional securities (in the case of convertible debt securities) and exercise of the option by the underwriters before the closing • Delivery and payment of the securities through the Depository Trust Company (a securities depository that holds the physical certificate and allows for electronic book-entry transfers) The closing mechanics of follow-on offerings vary depending on a number of factors. For the purposes of this memorandum, the following assumptions apply: • The debt securities are unsecured. (If they are secured, additional closing documents, such as pledge agreements and other agreements related to the security for the debt would be required.) • The debt securities are not guaranteed by subsidiaries of the company and so there is no need for guarantee documents or extensive additional closing certificates and legal opinions for the subsidiaries. • The offering qualifies for an exemption from filing with the Financial Industry Regulatory Authority (FINRA) (such as would be the case for certain investment grade debt, for example) (for more information on FINRA, see FINRA Regulations) • The offering is not on a delayed or continuous basis pursuant to Rule 415 (17 C.F.R. § 230.415) under the Securities Act of 1933, as amended (a shelf offering). For more information on shelf offerings, see Shelf Registration. • The debt securities are issued under an indenture for this particular issuance (rather than under a global indenture requiring a supplemental indenture for each separate issuance of debt). This closing memorandum includes additional explanations and practice tips for the closing process, but should be tailored to the specifics of your transaction. Particular attention should be paid to the relevant underwriting agreement and indenture, as those documents may include additional closing mechanics or documents. For more information on follow-on offerings generally, see Registered Securities Offerings Post-IPO. For additional information on the closing of a registered debt offering, see Closing Checklist (Non-Shelf Registered Debt Offerings), Trustee’s Certificate (Registered Debt Offerings), Cross-Receipt (Registered Debt Offerings), Secretary’s Certificate (Registered Debt Offerings) and Authentication Order (Registered Debt Offerings). For more on board resolutions generally, see Board Resolutions for Capital Markets Transactions Resource Kit.