Consent Solicitation

AAA

DEFINITION of 'Consent Solicitation'

The process by which a security's issuer proposes changes to the material terms of the security agreement, to investors who hold a stake in the security. A consent solicitation is usually a request for permission to make a change in the terms of the security agreement, since mutual consent is required for any changes.

INVESTOPEDIA EXPLAINS 'Consent Solicitation'

A consent solicitation usually states a specific date by which stakeholders must respond. The security issuer may enact changes if the required number or percentage of stakeholders agrees to the change(s). If less than the required percentage of stakeholders agrees to the changes, the measure fails and the changes cannot be enacted.


A common example of consent solicitation occurs within the bond market. If the original terms of the indenture are no longer in the best interest of the issuer and bond holders (affecting the viability of the bond issue) the issuer may approach the bond holders through a consent solicitation statement. Bond holders who consent to the changes may receive a consent payment. Consent solicitations typically must be filed with the U.S. Securities and Exchange Commission (SEC).

RELATED TERMS
  1. Indenture

    A legal and binding contract between a bond issuer and the bondholders.
  2. Shareholder

    Any person, company or other institution that owns at least one ...
  3. Customer's Loan Consent

    An agreement signed by the customer of an investment firm. The ...
  4. Bond

    A debt investment in which an investor loans money to an entity ...
  5. Stakeholder

    A party that has an interest in an enterprise or project. The ...
  6. Surrender Period

    The amount of time an investor must wait until he or she can ...
Related Articles
  1. Investing

    What is the difference between a shareholder and a stakeholder?

    Shareholders are stakeholders in a corporation, but stakeholders are not always shareholders. A shareholder owns part of a company through stock ownership, while a stakeholder is interested in ...
  2. Investing

    The Advantages Of Bonds

    Bonds contribute an element of stability to almost any portfolio and offer a safe and conservative investment.
  3. Bonds & Fixed Income

    Convertible Bonds: An Introduction

    Find out about the nuts and bolts, pros and cons of investing in bonds.
  4. Retirement

    Bond Basics Tutorial

    Investing in bonds - What are they, and do they belong in your portfolio?
  5. Mutual Funds & ETFs

    How much of my total assets should I be keeping in my money market account?

    Investing a portion of total assets in a cash position such as a money market account provides investors access to funds in the case of an emergency.
  6. Bonds & Fixed Income

    How does preferred stock differ from company issued bonds?

    Discover the primary differences between preferred stock and corporate bonds, two income-generating investment vehicles issued by certain companies.
  7. Bonds & Fixed Income

    What is the difference between yield to maturity and the yield to call?

    Determining various the various yields that callable bonds can provide investors is an important factor in the bond purchasing process.
  8. Bonds & Fixed Income

    How do I calculate yield to maturity of a zero coupon bond?

    Find out how to calculate the yield to maturity for a zero coupon bond, and see why this calculation is more simple than a bond with a coupon.
  9. Bonds & Fixed Income

    Why are bond yields calculated in terms of basis points?

    Find out why financial analysts and publications track and quote bond yields in basis points, or bps, rather than simply stating percentages.
  10. Economics

    America's Most Notorious Corporate Criminals

    Learn about the crimes and punishments of some of the most infamous convicted white-collar crooks.

You May Also Like

Hot Definitions
  1. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  2. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  3. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  4. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  5. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  6. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
Trading Center