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. Bond

    A debt investment in which an investor loans money to an entity ...
  2. Indenture

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

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

    An agreement signed by the customer of an investment firm. The ...
  5. Stakeholder

    A party that has an interest in an enterprise or project. The ...
  6. Next Generation Fixed Income (NGFI) ...

    A Next Generation Fixed Income (NGFI) manager is a fixed income ...
RELATED FAQS
  1. 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 ... Read Full Answer >>
Related Articles
  1. Investing

    The Advantages Of Bonds

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

    Convertible Bonds: An Introduction

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

    Bond Basics Tutorial

    Investing in bonds - What are they, and do they belong in your portfolio?
  4. Bonds & Fixed Income

    Should Junk Bond ETFs Be a Part of Your Portfolio?

    Should junk bonds be a part of your portfolio? Here's what you need to know.
  5. Professionals

    Vanguard Readies Muni Bond ETF

    Vanguard is set to roll out a muni bond ETF, the firm's first.
  6. Mutual Funds & ETFs

    Is the TLT ETF a Good Bet for the Long Run?

    Is the iShares 20+ Year Treasury Bond ETF (TLT) a good bet for the long run?
  7. Bonds & Fixed Income

    African Equities vs. Bonds: Risks and Rewards

    A look at the risks and rewards of exposure to African equities vs. bonds.
  8. Bonds & Fixed Income

    How Rate Hikes Will Affect Your Investments?

    An interest rate hike by the Fed, which will happen either during their June or September meeting, could impact your fixed income investments.
  9. Professionals

    Is Now the Time for Junk Bonds?

    A bet on high-yield bonds is a bet that the global economy will continue to improve...but not too much.
  10. Mutual Funds & ETFs

    Preferred Stock ETFs: Are They Right for You?

    Considering preferred stock ETFs? Here's a look at their pros and cons.

You May Also Like

Hot Definitions
  1. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  2. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  3. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  4. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
  5. Preference Shares

    Company stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a ...
  6. Accrued Interest

    1. A term used to describe an accrual accounting method when interest that is either payable or receivable has been recognized, ...
Trading Center