Debt Exchange Offers: Legal Strategies for Distressed Issuers

Navigating Complex Securities Laws When Restructuring Convertible Debt Securities

Recording of a 90-minute premium CLE webinar with Q&A

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Conducted on Thursday, April 15, 2010

Recorded event now available

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Course Materials

This CLE course will provide guidance on debt exchange offers for counsel to companies seeking to restructure their balance sheets and mitigate debt service requirements. The panel will examine current trends in the use of debt exchange offers, explain how exchange offers are being structured, and outline strategies for distressed issuers.


The recent surge in debt exchange offer activity will persist throughout 2010 as companies remain over-leveraged, credit markets are tight, default rates rise, earnings and revenue prospects are grim, and trading prices for speculative-grade corporate debt remain depressed.

Debt exchange offers are an alternative for companies seeking to restructure their balance sheets and gain relief from debt service requirements. However, these complex transactions raise a host of legal issues involving significant execution and restructuring risks.

In addition, the manner in which debt exchange offers are conducted is subject to SEC regulation. Exchanges must be registered under the Securities Act of 1933 unless they qualify for an exemption and are also subject to the tender offer rules under the Securities Exchange Act of 1934.

Listen as our panel of attorneys experienced in leveraged finance transactions reviews current trends in the use of debt exchange offers, explains how to structure exchange offers, and provides strategies for counsel to distressed issuers in the current market.



  1. Current trends in debt exchange activity
  2. Types of exchange offers
    1. Section 3(a)(9) exchange offer
    2. Private exchange offer
    3. Registered exchange offer
  3. Securities laws governing debt exchange offers
  4. Factors to consider when using debt exchange offers
    1. Pre-launch communications with existing bondholders
    2. All holders/best-price requirements
    3. Withdrawal rights
    4. Pre-commencement lock-ups
    5. Credit documents’ limitations
    6. Tax implications
    7. Consent solicitations
    8. Early consent deadline
    9. Consent fees
    10. Credit default swaps
    11. Dealer-manager/financial advisor issues


The panel will review these and other key questions:

  • What factors are driving the increase in debt exchange offer activity?
  • What are the basic legal considerations for companies considering debt restructuring via debt exchange offers?
  • How can corporate issuers incentivize bondholders to participate in exchange offers?


Michael Kaplan
Michael Kaplan

Davis Polk & Wardwell

He regularly works for issuers and underwriters in connection with capital markets and leveraged finance transactions,...  |  Read More

James J. Moloney
James J. Moloney

Gibson Dunn & Crutcher

He focuses on securities, M&A, friendly and hostile tender offers, proxy contests, going-private transactions, and...  |  Read More

Lawrence G. Wee
Lawrence G. Wee

Paul Weiss Rifkind Wharton & Garrison

His practice includes public equity offerings, high-yield and investment-grade debt offerings, convertible debt...  |  Read More

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