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PA Bulletin, Doc. No. 04-546

NOTICES

SECURITIES COMMISSION

Securities Transaction Exemption for SEC Rule 144A Exchange Transactions in Debt Securities with Certain Accredited Investors; Exemption Order

[34 Pa.B. 1734]

   Whereas, Rule 144A adopted by the United States Securities and Exchange Commission (SEC) under the Securities Act of 1933 (1933 Act) (17 C.F.R. § 230.144A) applies to private resales of securities purchased by a Qualified Institutional Buyer (QIB) from an issuer (Rule 144A Issuer) in a nonpublic offering of securities exempt under Section 4(2) of the 1933 Act (Rule 144A Offering); and

   Whereas, Under SEC Rule 144A, a QIB may effect a private resale of securities purchased in a Rule 144A Offering to an institutional accredited investor as defined in Rule 501(a)(1), (2), (3) or (7) of SEC Regulation D (17 C.F.R. §§ 230.501(a)(1)--(3), (7)) (Institutional Accredited Investor); and

   Whereas, It is not uncommon for a Rule 144A Issuer to file a registration statement with SEC under Section 5 of the 1933 Act subsequent to a Rule 144A Offering in which the Rule 144A Issuer seeks to register debt securities with the same characteristics as the debt securities it sold in the Rule 144A Offering (Registered Debt) and, for no additional consideration, exchange the Registered Debt for debt securities sold in the Rule 144A Offering (Exchange Transaction); and

   Whereas, An Institutional Accredited Investor located in the Commonwealth of Pennsylvania that holds debt securities sold in the Rule 144A Offering may receive an offer to exchange those debt securities for Registered Debt; and

   Whereas, The Pennsylvania Securities Commission (Commission), after due deliberation, has determined that it is necessary and appropriate and consistent with the purposes fairly intended by the Pennsylvania Securities Act of 1972 (1972 Act) to issue the following order:

   Now, Therefore, on this 16th day of March 2004, the Commission, pursuant to Section 203(r) of the 1972 Act, finds that it is neither necessary nor appropriate for the protection of investors to require registration under Section 201 of the 1972 Act for the offer or sale of a security in a transaction if the following requirements are met:

   (1)  A person who owns outstanding debt securities (and any related guarantees) exchanges those securities for debt securities (and any related guarantees) of the same issuer which are the subject of an effective registration statement filed with the United States Securities and Exchange Commission (SEC) under Section 5 of the Securities Act of 1933 (15 U.S.C. § 77(e)) (Exchange Transaction).

   (2)  The outstanding debt securities (and any related guarantees) are ''restricted securities'' as that term is defined in SEC Regulation 144(a)(3) (17 C.F.R. § 230.144(a)(3)).

   (3)  No consideration is paid by the owner of the outstanding debt securities (and any related guarantees) in connection with the Exchange Transaction.

   (4)  There are no material differences in the terms of the outstanding debt securities (and any related guarantees) and the debt securities (and any related guarantees) which are the subject of the Exchange Transaction.

   The effective date of this Order shall begin on the date the Order is published in the Pennsylvania Bulletin and shall end on the date of publication in the Pennsylvania Bulletin of a final rule adopted by the Commission codifying an exemption containing substantially the same terms as this Order in Title 64, Chapter 203 of the Pennsylvania Code.

JEANNE S. PARSONS,   
Secretary

[Pa.B. Doc. No. 04-546. Filed for public inspection March 26, 2004, 9:00 a.m.]


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