2620.1 Subsidiaries of Affiliates whose Securities are Pledged – S-X 13-02(a)(4) requires disclosure of summarized financial information for each affiliate whose securities are pledged as collateral. Because the securities pledged as collateral are an equity interest in a given pledgor affiliate, the financial information of all subsidiaries that would be consolidated by that affiliate must be included in that affiliate’s summarized financial information presented pursuant to S-X 13-02(a)(4), even if the securities of those subsidiaries are not pledged as collateral. This presentation is different from the disclosures applicable to issuers and guarantors of guaranteed securities, which require non-issuer and non-guarantor subsidiaries of issuers and guarantors to be excluded from the financial information of issuers and guarantors in order to distinguish the financial information of entities that are legally obligated to pay from those that are not [S-X 13-01(a)(4)(iii)].

2620.2 Guaranteed & Collateralized Securities – A registrant may register the offer and sale of its debt securities that are: (1) guaranteed by one or more of its subsidiaries; and (2) collateralized by the securities of the same guarantor subsidiaries. In these circumstances, each are separate credit enhancements for which separate and different financial and non-financial disclosures are required by each of S-X 13-01 (see Section 2500) and 13-02. In this regard, under S-X 13-01, the summarized financial information of the registrant, as the “parent company,” is required to be disclosed under S-X 13-01(a)(4). Dissimilarly, that same parent company’s summarized financial information is not required to be disclosed under S-X 13-02(a)(4), because it is not an affiliate whose securities collaterize securities registered or being registered. Disclosures provided pursuant to each of these rules in a registrant’s filing should be clearly distinguished from one another.

2620.3 Unconsolidated Pledged Affiliates – In the rare circumstances where the securities of an affiliate that is not a consolidated subsidiary of a registrant collateralize the registered securities of that registrant, S-X 13-02(a)(6) and (7) require the registrant to provide any financial and narrative information about each such affiliate if the information would be material for investors to evaluate the pledge of the affiliate’s securities as collateral and sufficient information so as to make the financial and non-financial information presented not misleading. Because the unconsolidated affiliate’s financial information is not included in the registrant’s consolidated financial statements, disclosure beyond what is specified in S-X 13-02(a)(1) through (4) may be necessary. In this regard, separate financial statements of the unconsolidated affiliate may be necessary to satisfy the requirements of S-X 13-02(a)(6) and (7).

2620.4 Less than 100% of Affiliate Shares Pledged as Collateral – Generally, a pledge of an affiliate’s securities as collateral includes all of the outstanding ownership interests in that affiliate, which are held directly or indirectly by the entity issuing the debt securities. There may be circumstances where either the pledge of collateral does not include all of the outstanding ownership interests in the affiliate held by the issuing entity, or certain ownership interests in the affiliate are held by a third party and therefore unpledged. In such cases, disclosure of these facts and circumstances are required by S-X 13-02(a)(6) and (7) if material for investors to evaluate the pledge of the affiliate’s securities as collateral, or so as to make the financial and non-financial information presented not misleading. If such circumstances are applicable to one or more, but not all, affiliates, S-X 13-02(a)(4)(iv) requires separate disclosure of Summarized Financial Information for the affiliates to which it is applicable.