Legal Alerts Feb 6, 2019

New Disclosure Requirements for Municipal Debt Issuers

Take Effect this Month


The Securities and Exchange Commission adopted amendments last year to the Securities and Exchange Act of 1934 Rule 15c2-12 that will require municipal debt issuers to make additional disclosures upon the occurrence of certain events. These requirements go into effect later this month.
The amendments require the inclusion of two new events that are required to be noticed for any continuing disclosure undertaking as follows:

  • Incurrence of a financial obligation of the issuer or obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the issuer or obligated person, any of which affect security holders, if material (Rule 15c-2-12(b)(5)(i)(C)(15)) and
  • Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of the financial obligation of the issuer or obligated person, any of which reflect financial difficulties (Rule 15c-2-12(b)(5)(i)(C)(16)).

The term “financial obligation” broadly includes any debt obligation, derivative instrument entered into or pledged as security for an existing or planned debt obligation or a guarantee for such obligations, which may include items such as equipment leases if such leases operate as a vehicle to borrow money.
If you have any questions about these requirements or how they may impact your agency, please contact the author of this Legal Alert listed to the right in the firm’s Public Finance practice group, or your BB&K attorney.
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Disclaimer: BB&K Legal Alerts are not intended as legal advice. Additional facts or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information in this communiqué.

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