WKSI Stop-Gap for Shelf Registrations

A couple of days ago, the Corporate Counsel blog had a post about steps, outlined on the phone by SEC staff, that will allow issuers who lose WKSI status to continue to use an existing automatic shelf registration.

WKSI is an acronym of "well-known and seasoned issuer," an issuer category created by the '33 Act reforms which became effective in December of 2005 (release 33-8591 (pdf)). A company is a WKSI if it has $700 million in market capitalization and a year of '34 act reports filed and up-to-date. Because of falling stock prices, many WKSIs have dropped below the $700 million threshold. First Midwest Bancorp (FMSI), for instance, was a WKSI yesterday. Since yesterday their share price has gone down about a dollar and their market cap it currently $686.09 million. See this memo from Paul Hastings for more on what happens when you lose WKSI status.

WKSI status confers a bunch of benefits. See this White & Case Q&A for a quick summary and this giant Sullivan & Cromwell memo (pdf) for a very thorough treatment.