SEC Improves Disclosures for Debt Offerings on a Registered Basis

The SEC has issued a final rule, Financial Disclosures About Guarantors and Issuers of Guaranteed Securities and Affiliates Whose Securities Collateralize a Registrant’s Securities.

The amendments in the final rule “focus on the provision of material, relevant, and decision-useful information regarding guarantees and other credit enhancements, and eliminate prescriptive requirements that have imposed unnecessary burdens and incentivized issuers of securities with guarantees and other credit enhancements to offer and sell those securities on an unregistered basis.” Among other changes, the final rule will eliminate the current requirement to provide condensed consolidating financial information in certain circumstances and replace it with a requirement to disclose summarized financial information about the obligors.

The final rule will become effective on January 4, 2021. For more information, see the press release on the SEC’s Web site.