The Securities and Exchange Commission adopted amendments last year to the Securities and Exchange Act of 1934 Rule 15c2-12 that will require municipal debt issuers to make additional disclosures upon the occurrence of certain events. These requirements go into effect later this month.
 
The amendments require the inclusion of two new events that are required to be noticed for any continuing disclosure undertaking as follows:

• Incurrence of a financial obligation of the issuer or obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the issuer or obligated person, any of which affect security holders, if material (Rule 15c-2-12(b)(5)(i)(C)(15)) and
• Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of the financial obligation of the issuer or obligated person, any of which reflect financial difficulties (Rule 15c-2-12(b)(5)(i)(C)(16)).

 
The term “financial obligation” broadly includes any debt obligation, derivative instrument entered into or pledged as security for an existing or planned debt obligation or a guarantee for such obligations, which may include items such as equipment leases if such leases operate as a vehicle to borrow money.

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