On June 30, 2026, the Division of Corporation Finance (the Division) of the U.S. Securities and Exchange Commission (the SEC) issued an exemptive order (the Order), effective immediately, that materially broadens the availability of five business day tender and exchange offers (Five Business Day Tender Offers) for nonconvertible debt securities. The Order supersedes the Division’s 2015 no-action letter¹  (2015 Letter), which allowed Five Business Day Tender Offers in narrower circumstances. Tender and exchange offers for nonconvertible debt securities that do not meet the conditions set forth in the Order continue to be required to remain open for 20 business days, and may include a 10 business day early tender period for participating investors to receive full consideration.

Similar to the April 2026 exemptive order that permitted shortened tender offer periods for certain qualifying equity tender offers (the April Order) (see Akin alert), the Division issued this relief to “address market inefficiencies, better reflect technological advancements, reduce exposure to fluctuations in the market and in interest rates, and facilitate the availability of tender offers as debt management transactions.”

Why It Matters

• Investors: By expanding eligibility for Five Business Day Tender Offers, the Order subjects a much wider range of tender and exchange offers to the expedited five business day timetable, including transactions that “strip” covenants from bonds held by nonparticipating holders and tender offers that are financed with the proceeds of priming debt. Investors will be required to assess increasingly complex economic and structural considerations in a fraction of the time that similar transactions historically afforded.

  Against this backdrop, early coordination among bondholders will become essential in many circumstances. Investors that delay organizing may risk exhausting the limited time available to evaluate the offer and mount a collective response.

• Issuers: This Order provides issuers with meaningful flexibility in structuring refinancing and exchange transactions. The Order may accelerate the adoption of innovative transaction structures, while improving execution certainty.

Key Changes You Should Know About

• Consent Solicitations. A consent solicitation may be made in connection with a Five Business Day Tender Offer, so long as the related amendments to the indenture or security require the consent of no more than a simple majority of the outstanding principal amount of the debt securities subject to the Five Business Day Tender Offer (the Subject Securities) — the threshold that typically applies to covenant modification and removal. The 2015 Letter did not allow consent solicitations in connection with Five Business Day Tender Offers.
• Removed Financing Condition. Five Business Day Tender Offers may now be financed with the proceeds of senior indebtedness — for example, issuing secured debt to fund a tender for unsecured bonds or issuing debt with subsidiary guarantors to fund a tender for unguaranteed bonds. The 2015 Letter did not allow Five Business Day Tender Offers to be financed with priming debt.
• Partial Offers. Partial, prorated Five Business Day Tender Offers are now permitted. The 2015 Letter allowed only “any and all” offers in which all tendered bonds would be accepted.
• Compressed Timeline for Evaluating Revised Terms. The Order requires a Five Business Day Tender Offer to remain open for at least three business days after a change in consideration or the amount sought (other than a ≤2% increase in the amount sought, which can be determined at expiration). The 2015 Letter required a Five Business Day Tender Offer to remain open for at least five business days after a change in consideration. A Five Business Day Tender Offer must remain open for at least two business days after any other material change, rather than three business days under the 2015 Letter.
• Extraordinary Transaction Prohibition Replaced with a Ten Business Day Waiting Period. Under the 2015 Letter, a Five Business Day Tender Offer generally could not be conducted if it was made in anticipation of, in response to, or concurrently with a change of control or other extraordinary transaction. The Order replaces that restriction with a bright-line 10 business day waiting period following the first public announcement or consummation of the transaction, making it substantially easier to structure Five Business Day Tender Offers alongside strategic transactions.
• Qualified Debt Securities. The Order permits debt securities to be offered in an exchange offer (Qualified Debt Securities) if their terms are substantially similar, other than economic terms, to either (1) the Subject Securities or (2) the issuer’s most recent issuance of debt securities that are pari passu with the Subject Securities. This is relaxed from the standard in the 2015 Letter which required the new debt securities to be identical in all material respects, other than economic terms, to the Subject Securities, with a weighted average life to maturity that is longer than the Subject Securities.
• Expanded Eligible Participants. The pool of holders that can receive Qualified Debt Securities now expressly includes institutional accredited investors, alongside Qualified Institutional Buyers and non-U.S. persons as specified in the 2015 Letter. At the same time, the Order removed a protection for excluded holders by dropping the requirement in the 2015 Letter to offer excluded holders a cash alternative approximating the value of the exchange consideration.

The discussion above is not intended to be an exhaustive description of the changes to the conditions set forth in the 2015 Letter. For the complete set of conditions applicable to Five Business Day Tender Offers, please refer to the Order.

What This Means in Practice

Investor Impact: Higher Stakes and More Complex Decisions in the Same Five Business Days

• More Complex Review. Within an already limited timeframe, investors may need to evaluate more complex factors as Five Business Day Tender Offers are no longer limited to “any and all” offers without an associated consent solicitation, a priming debt incurrence or a related extraordinary transaction. Partial tenders involving proration and consents, for example, require investors to assess participation levels and the risk of receiving covenant-stripped bonds for the portion of bonds that are not accepted for repurchase. Under the Order’s abbreviated five business day timetable, holders have less opportunity to evaluate these factors and limited ability to respond before expiration, increasing pressure to participate, even when the long-term economics are uncertain. Given this time pressure, bondholders may benefit from preemptive coordination and potentially entry into cooperation agreements to build mutual trust and protect value.
• Faster Decisions. Investors will need to act quickly and ensure that their custodial and internal approval processes can keep pace with this new, expedited timeline. In practice, custodial notification delays, internal decision making, and coordination across multiple custodians can compress an investor’s effective decision window in a Five Business Day Tender Offer to as little as one or two business days.
• Increased Agility. Submitting a tender may no longer be a one-time decision. As offer terms may now be materially revised with the offer remaining open for only two or three business days after the changes are announced, investors will have less time to evaluate changes in consideration, the amount of securities sought, or other material terms before deciding whether to tender or withdraw.
• Subordination Risk. Investors that choose not to tender may face a heightened risk of being subordinated to a new class of securities. Issuers may now finance a Five Business Day Tender Offer with new senior debt that benefits from additional guarantees, collateral, higher lien priority or senior payment rights that prime remaining holders of the Subject Securities.

Issuer Impact: Issuers Gain Flexibility and Speed

• More Flexible, Better-Financed Deals. Issuers can now run partial, prorated offers sized to their objectives (for instance, retiring a proportion of multiple series of debt securities rather than committing to an entire series) and fund such offers with new secured or structurally senior debt. That flexibility permits issuers to quickly capture a favorable market window, calibrate the appropriate repurchase size as compared to available financing, and reduce both pricing and execution risk. In addition, issuers may exchange existing debt for new debt securities that have substantially similar terms to the most recent issuance of pari passu debt securities (other than maturity date, interest payment and record dates, redemption provisions and interest rates), allowing issuers to incorporate more flexible covenant packages that have cleared the market since the original issuance of the Subject Securities.
• Strategic Planning Around Extraordinary Transactions. By replacing the 2015 Letter’s restriction on Five Business Day Tender Offers in connection with extraordinary transactions with a 10 business day waiting period, the Order allows issuers to refinance or retire debt more efficiently alongside change of control and other major transactions, facilitating capital structure optimization.

We will continue to monitor developments related to this Order and its application. Please contact any member of our Capital Markets and Public Company group with questions about how this relief may apply to your pending or anticipated transactions.

¹ See SEC No-Action Letter, Cahill Gordon & Reindel LLP (Jan. 23, 2015), https://www.sec.gov/divisions/corpfin/cf-noaction/2015/abbreviated-offers-debt-securities012315-sec14.pdf.