On March 2, the Securities Exchange Commission (SEC) adopted amendments that, among other things, significantly reduce the subsidiary guarantor financial statement requirements in periodic reports for companies that have registered debt that is guaranteed by subsidiaries. These changes are part of the SEC’s ongoing efforts to modernize and ease disclosure burdens for public companies. The SEC hopes that these amendments will facilitate an increase in the number of registered (versus unregistered) debt offerings.
Although the amendments do not become effective until January 2021, in light of the relief offered, many companies are preparing to voluntarily comply with the amendments in advance of the effective date (which is expressly permitted by the SEC).
This alert briefly describes the changes to existing reporting requirements for subsidiary guarantors. The SEC’s press release announcing the changes and full text of the final rule can be found here.