8.4.2 Event Notices

The undertaking also requires the issuer to provide notice “in a timely manner not in excess of 10 business days after the occurrence of” certain types of events relating of the securities for which the undertaking has been made that are likely to be material to bondholders or potential investors. SEC Rule 15c2-12 was amended, effective December 1, 2010, again, effective February 27, 2019,132 to expand this list of events. Figure 8-1 lists the notification requirements for various events.

Figure 8-1

NOTICE OF MATERIAL EVENTS (AS OF AUGUST 1, 2018)

EVENTS THAT ALWAYS REQUIRE NOTIFICATION

EVENTS THAT REQUIRE NOTIFICATION IF MATERIAL

Principal and interest payment delinquencies
Unscheduled draws on debt service reserves reflecting financial difficulties
Unscheduled draws on credit enhancements reflecting financial difficulties
Substitution of credit or liquidity providers, or their failure to perform
Issuance by the Internal Revenue Service of proposed or final determination of taxability or of a Notice of Proposed Issue (IRS Form 5701 TEB)
Tender offers
Defeasances
Rating changes
Bankruptcy, insolvency, receivership, or similar event of the obligated person
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

Unless described in the left hand column, adverse tax opinions or other material notices or determinations by the Internal Revenue Service with respect to the tax status of the securities or other material events affecting the tax status of the securities
Modifications to rights of holders of the securities
Optional, unscheduled, or contingent bond calls
Release, substitution, or sale of property securing repayment of the securities
Non payment related defaults
The consummation of a merger, consolidation or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action, or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms
Appointment of a successor or additional trustee or the change of name of a trustee
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

There are regular discussions and proposals for the SEC to modify the list in Table 8-1. Issuers and obligors that have to prepare undertakings need to stay up to date with the latest version of SEC Rule 15c2-12. CDAs must track the required lists. In rare instances, however, underwriters may advise an issuer that additional events critical to the security for the deal should be included. Of course, issuers may also provide notices of the occurrence of other events through voluntary EMMA filings.