Ratings Disclosures in Registered Offerings - Further Developments

The staff of the SEC’s Division of Corporation Finance today released new interpretations addressing the circumstances where rating agency consents may be required in registration statements and prospectuses for registered offerings (which apply outside the context of asset-backed securities). This follows the abrogation of Securities Act Rule 436(g) by the Dodd-Frank Act and a white paper issued by ten law firms including Cleary Gottlieb. The new interpretations, which are attached below, are consistent with the analysis in the white paper, which was distributed in an e-mail blast yesterday.

On a separate note, the Director of the Division of Corporation Finance issued a statement earlier today stating that the Division expects to issue a no-action letter within the next day that will allow issuers to omit credit ratings from registration statements filed under Regulation AB for a period of six months, in order to address issuer concerns that they cannot currently obtain credit rating agency consents to include the credit ratings in those filings. The statement indicated this action is expected to provide issuers, rating agencies and other market participants with a transition period to implement changes to comply with the new statutory requirement while still conducting registered ABS offerings. The full statement may be found at the following link: http://www.sec.gov/news/speech/2010/spch072210mc.htm.

Please feel free to contact any of your regular contacts at the firm or any of our partners and counsel listed under Capital Markets if you have any questions.