Exchange Offers under Section 3(a)(9)

Summary

This practice note discusses restructuring securities via an exchange offer made pursuant to the exemption from registration provided by Section 3(a)(9) (15 U.S.C. § 77c) of the Securities Act of 1933, as amended (Securities Act). Companies seek to restructure their outstanding securities (usually debt securities, but sometimes equity securities, such as preferred stock) for a number of reasons. These include reducing debt service (by lowering interest rates or reducing outstanding principal), modifying terms of the securities, eliminating restrictive covenants and other unfavorable provisions in debt indentures, and extending debt maturity dates. There are a number of transactions and restructuring options available for these purposes, including cash tender offers, privately negotiated or open market purchases, cash redemptions (if permitted under governing documents), consent solicitations, and registered and exempt exchange offers.