On January 23, 2015, the staff of the Division of Corporation Finance of the U.S. Securities and Exchange Commission (SEC) issued revised guidance as to when a debt tender offer may be open for fewer than 20 business days. The guidance modernizes a number of the SEC staff’s long-standing positions and changes the terms and conditions previously permitted for abbreviated debt tender offers.

Overview -

Rule 14e-1(a) under the Securities Exchange Act of 1934 requires that all tender offers must be open for at least 20 business days. Rule 14e-1(b) requires that a tender offer remain open for at least 10 business days after any change in the consideration offered. Notwithstanding these rule requirements, the SEC staff historically took the position that it would not recommend enforcement action to the SEC if certain debt tender offers were conducted over a period of fewer than 20 business days or if the offer did not remain open for the required 10 business-day period following a change in consideration. The tender offers that were eligible to use these abbreviated periods — generally seven to 10 calendar days — were limited to issuer tender offers to repurchase investment grade, non-convertible debt securities based on a fixed cash offer price or a fixed-spread benchmark formula. These tender offers also were at times accompanied by a consent solicitation seeking to change or eliminate debt covenants.