Consent Solicitation
A Consent Solicitation is a process in which an issuer or borrower asks holders of debt securities or loans to approve specified amendments, waivers or other changes to the governing debt documents.
The process changes documents through holder voting
Debt documents specify which amendments can be approved by majority, supermajority or affected-holder consent.
The solicitation is the issuer's formal process for obtaining the required votes.
Consent solicitations often accompany exchange offers
Current 2026 transactions pair an exchange with a solicitation to remove restrictive covenants and selected events of default from the old notes.
That can make the new securities more attractive relative to the residual old debt.
A consent fee can create an economic incentive
Issuers can pay holders who deliver valid consents before the stated deadline.
The amount can be small relative to principal, but it compensates holders for supporting the amendment and can accelerate participation.
Supplemental indentures implement approved changes
Once the requisite consents are received, the issuer and trustee can execute a supplemental indenture implementing the proposed amendments.
Depending on the provision and applicable voting rule, non-consenting holders can then remain in debt governed by the amended document.
Consent thresholds can produce different outcomes from exchange thresholds
Assume $1 billion of notes are outstanding. The exchange offer attracts 70% participation, while the indenture requires only a majority to eliminate several restrictive covenants.
The issuer has enough consents to amend the old notes even though 30% of the securities remain outstanding.
Those holdouts may now own an instrument with the same principal and coupon but fewer covenant protections.
The reverse can also happen. An exchange can attract substantial tenders but fail to obtain the separate threshold needed for a particular amendment.
A complete transaction table should therefore show:
principal tendered → principal consenting → required amendment threshold → amendments that become effective → amount of old debt remaining after settlement.
That sequence is more informative than a single participation percentage.
Common mistakes
Treating consent solicitation and exchange offer as the same process One changes documents; the other exchanges securities.
Assuming every term can be changed by majority vote Protected payment rights can require higher consent.
Ignoring the post-amendment old debt Holdouts can remain in an instrument with fewer protections.
Example
An issuer launches an exchange offer for old notes and simultaneously asks holders to approve amendments eliminating substantially all restrictive covenants. The indenture requires majority consent. Once the threshold is obtained and the supplemental indenture becomes effective, the amendments can bind holders who did not consent, subject to the governing document and applicable law.
Example
An issuer launches an exchange offer for old notes and simultaneously asks holders to approve amendments eliminating substantially all restrictive covenants. The indenture requires majority consent. Once the threshold is obtained and the supplemental indenture becomes effective, the amendments can bind holders who did not consent, subject to the governing document and applicable law.
Professional note
Distinguish the solicitation threshold from the exchange participation level. The company can sometimes obtain enough votes to amend the old debt even if fewer holders ultimately exchange.
Related terms
- Required Lenders
Required Lenders are the lenders holding the contractually specified percentage of loans, commitments or exposures needed to approve many amendments, waivers, directions and other collective lender actions under a credit agreement.
- Sacred Rights
Sacred rights are lender protections covering specified core economic or structural loan terms that cannot be amended or waived solely through the ordinary Required Lenders vote and instead require consent from each affected lender or another heightened voting threshold.
- Debt Exchange Offer
A debt exchange offer is an offer by an issuer or borrower to holders of existing debt to surrender that debt in exchange for newly issued debt or other securities under stated terms and conditions.
- Exit Consent
An exit consent is a consent to amend existing debt documents that is delivered by a creditor in connection with exchanging or tendering that debt, typically just before the creditor exits the old instrument.
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