A non-WKSI issuer registered $200 million of notes on a Form S-3 shelf that has been declared effective. To date, $50 million of the notes have been sold. The registration statement discloses that more than one, but not all, of the issuer’s wholly owned subsidiaries fully and unconditionally guarantee the notes and includes each of the current subsidiary guarantors as a co-registrant. The indenture permits the issuer to add future guarantors without approval of the debt holders.

Must the issuer update the registration statement to add a subsidiary guarantor?It depends. If the guarantor will be added in connection with a new offering of notes, the issuer must update the registration statement to reflect the new guarantor, because the addition of a guarantor involves the offer and sale of a new security (the guarantee) that was not reflected in the registration statement at the time it was declared effective.

Since the registration statement in question is not a WKSI shelf, the issuer may not update the initial registration statement by way of an automatically effective post-effective amendment (WKSIs look to Rule 462(e) for that). Your non-WKSI issuer and the co-registrants (i.e., the guarantors) would have to file a new shelf covering the remaining securities reflecting the additional guarantor, which would be subject to SEC review. As part of this process, the issuer may carry forward the remaining securities and related filing fee from the initial registration statement to the new registration statement by combining the two under Rule 429. Bear in mind that the new registration statement must be filed prior to any offers relating to the new guarantee and declared effective prior to any sales.

By contrast, if the guarantor is only added to existing notes that were previously offered under the shelf, no update to the registration statement is needed (because there would be no new investment decision).

Does the required financial information in the registration statement change as a result of adding a new guarantor?

For a new registration statement, yes. Your new guarantor would have to be added to the disclosures required by S-X Rule 3-10. For a summary of these requirements, see our joint publication with KPMG: Financial Statement Requirements in US Securities Offerings: What You Need to Know at pp. 13-15.

In the case where the guarantor is added to existing notes, no change would be needed to the registration statement. But the issuer's Exchange Act reporting thereafter would likely need to reflect the additional guarantor under S-X Rule 3-10.