2016 Ruling 2015-0602711R3 - Interest on Notes to Non-Residents -- summary under Participating debt interest

CRA ruled that interest was not participating debt interest respecting subordinated notes with conventional terms other than that, on a redacted specified event (presumably respecting a shaky financial condition, as defined) the notes would be automatically converted into preferred shares based on a pre-determined conversion ratio. In particular, the notes were to bear interest at a fixed annual rate until the Interest Reset Date, after which they will bear interest on a specified basis plus a fixed spread. No interest on the Notes will accrue or be payable after the “Mandatory Event.”