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SEC proposes rules to simplify disclosures in registered debt offerings

Joe Mont | July 27, 2018

The Securities and Exchange Commission has proposed rule amendments to simplify and streamline the financial disclosure requirements applicable to registered debt offerings for guarantors and issuers of guaranteed securities, as well as for affiliates whose securities collateralize a registrant’s securities.

“Companies have a number of options to raise capital,” explained Commissioner Kara Stein. “Some raise capital through the sale of stock, some through the sale of debt, and others choose to do both.”

Even within these broad categories, there are numerous options. One method, for example, is for a parent company to issue debt that is guaranteed by one or more of its subsidiaries. Another method is for the parent company to guarantee debt issued by one or more of its subsidiaries. Such arrangements can occur in the private markets or the public markets.

“When publicly issuing guaranteed debt, current Commission rules require a company to provide investors with...

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