SEC Form T-1

What Is SEC Form T-1?

SEC Form T-1 is a statement of eligibility for a corporate trustee that must be filed with the U.S. Securities and Exchange Commission (SEC). The form portrays the entity's eligibility to act as a trustee under an indenture — a written agreement — with an issuer of debt securities, similar to bonds. The trustee represents those who invest in these securities. By making the trustee "go on record" and offer data about itself, Form T-1 is a step towards defending the security holders' rights.

Understanding SEC Form T-1

To defend the rights of bondholders, issuers of debt instruments (like bonds, notes, or debentures) are required by the Trust Indenture Act of 1939 (TIA) to retain a trustee. Overseeing the offering of notes, bonds, debentures, confirmations of indebtedness, and certificates of interest, the TIA is a law that prohibits bond issues valued more than $10 million (presently updated to $50 million) from being offered available to be purchased without a formal written agreement or indenture. Most corporate bond issues more than $5 million are required to incorporate a trust indenture.

While there are several types of indentures, quite possibly of the most common concern debt-related investments. In particular, it's a written agreement between the issuer of bonds, notes, or debentures and the trustee for these issues, who acts as a representative of the security holders. The indenture likewise indicates the terms and conditions of the debt securities, including the interest rate, maturity, any redemption terms, timing, and methods of payment, covenants, events of default, and some other explicitly negotiated terms and conditions. It additionally outlines the duties of the issuer and the trustee.

Who Can File SEC Form T-1?

Form T-1 is filed by the issuer of the bonds (or whatever the debt securities are). It is like SEC Form T-2 and SEC Form T-3, except that it is utilized for corporate trustees instead of individual ones.

Financial institutions — generally a bank or trust company — are recruited by issuers to act as third-party trustees, for their bond issues. The entity filling in as trustee acts for the bond or other security investors and agrees with additional procedural shields.

SEC Form T-1 contains fundamental operational and staff information about the proposed trustee, as well as its relationships with the issuer of debt and the underwriters, for example, whether the issuer or any underwriter holds any of the trustee's securities and whether the trustee holds any securities of the issuer or any underwriter.

Step by step instructions to File SEC Form T-1

The issuer files Form T-1 as an exhibit to its overall registration statement while formally filing a public offering of debt securities with the SEC.

You can satisfy a SEC filing obligation by submitting the information required electronically, utilizing the SEC EDGAR Online Forms Management website.

Download SEC Form T-1 Here

You can get a feeling of what Form T-1 seems to be and expects by downloading it here. Nonetheless, as noted over, the actual form must be filed electronically.

Highlights

• This trustee, generally a bank or trust company, has entered into a written agreement with the debt issuer to represent the investors who buy the bonds or debt securities.
• The issuer files Form T-1 as an exhibit to its overall registration statement while formally filing a public offering of debt securities with the SEC.
• Form T-1 contains fundamental operational and staff information about the proposed trustee, as well as its relationships with the issuer of debt and the underwriters.
• SEC Form T-1 is a statement of eligibility for a corporate trustee that must be filed with the U.S. Securities and Exchange Commission when new bonds or other debt securities are issued.
• By publicly registering and offering data about the trustee, Form T-1 is a step towards shielding the security holders' rights.