Principal Issues:
Supplemental ruling to 2006-019188 to incorporate minor revisions to definitions and proposed transactions.
Position:
Changes accepted.
Reasons:
No impact on any of the rulings given.
XXXXXXXXXX 2006-021056
XXXXXXXXXX, 2006
Dear XXXXXXXXXX:
Re: Advance Income Tax Ruling Request
XXXXXXXXXX
This is in reply to your letter of XXXXXXXXXX, wherein you requested certain changes to the advance income tax ruling issued to the above-noted partnership on XXXXXXXXXX, 2006 (our file number 2006-019188 and referred to as the "Ruling"). Consequently, the following amendments are made to the Ruling.
The following definitions contained in the Ruling are replaced by:
"ABC XXXXXXXXXX Tranche" means the portion of the Term Facility of up to US$XXXXXXXXXX to be provided by the Term Lenders pursuant to the Credit Agreement;
"Finco Term Facility" means a term facility of up to approximately US$XXXXXXXXXX (equivalent of approximately CA$XXXXXXXXXX) to be provided by Finco to ABC GP;
"Finco Tranche" means the portion of the Term Facility of up to an equivalent of approximately CA$XXXXXXXXXX (CA$XXXXXXXXXX less US$XXXXXXXXXX) to be provided to Finco by the Term Lenders pursuant to section XXXXXXXXXX of the Credit Agreement;
Paragraph 27 of the proposed transactions is replaced by the following:
At this time, it is expected that a maximum of approximately US$XXXXXXXXXX (CA$XXXXXXXXXX ) will be made available to Finco as a borrowing under the Term Facility and the remaining US$XXXXXXXXXX (CA$XXXXXXXXXX ) would be made available to ABC XXXXXXXXXX as a borrowing under the Term Facility. The full amount of the Term Facility will be drawn in a single drawing on the Closing Date.
Paragraph 28a) of the proposed transactions is replaced by the following:
The interest rate of the Term Facility will be, at the Borrower s' request, based on either U.S. base rate plus XXXXXXXXXX basis points or LIBOR rate plus XXXXXXXXXX basis points.
Paragraph 28c)(iii) of the proposed transactions is replaced by the following:
Commencing with the fiscal year ended before XXXXXXXXXX , from excess cash flow (ECF) as per the table below;
Leverage Ratio Cash Sweep
XXXXXXXXXX
The first sentence of paragraph 28c)(iv) of the proposed transactions is replaced by the following:
During the XXXXXXXXXX -year period commencing on the Closing Date, principal repayments as described in b) above applied to the outstanding loans under the Finco Tranche of the Term Facility or repaid as a result of the application of any of the mandatory repayment provisions other than as a result of an acceleration following an Event of Default cannot exceed XXXXXXXXXX % of the Finco Tranche of the aggregate principal amount of the Term Facility on the Closing Date.
Paragraph 28c)(v) of the proposed transactions is replaced by the following:
The Term Facility may be permanently prepaid at any time in whole or in part at the option of Finco and/or ABC XXXXXXXXXX with premium or penalty (subject to certain restrictions and call protection, if any), subject to customary breakage costs for LIBOR contracts, and provided that bankers' acceptances may not be prepaid, but may be cash collateralized. The minimum amount of such prepayment shall be CA$XXXXXXXXXX and multiples thereof; such prepayments shall be applied at the discretion of Finco and/or ABC XXXXXXXXXX .
Paragraph 28c)(vi) of the proposed transactions is amended by adding the following after 28c)(vi)(ii):
(iii) If a Borrower provides a reinvestment notice following an asset disposition of Term Facility collateral in accordance with paragraph 28c)(vi)b)(i) and (ii) above or is otherwise authorized to reinvest such proceeds (the "Term Receipts") in accordance with the provisions of the Credit Agreement, the relevant Borrower shall deposit the Term Receipts in an account with the US agent, in the relevant Borrower's name, or, at its option, shall purchase cash equivalents, which in either case will be considered to be Term Facility collateral. The relevant Borrower shall be entitled to use the amounts in question for its permitted capital expenditures program, investments, and for other long-term purposes.
Paragraph 28c)(vi)(e) of the proposed transactions is replaced by the following:
If but for the limitation set forth in paragraph 28c)(iv) above, a payment would have been required to be made by Finco in accordance with the provisions of the Credit Agreement (as described in paragraph 28c)(i) to (iii)), ABC XXXXXXXXXX shall repay an amount on amount of the ABC XXXXXXXXXX Tranche equal to the amount of the payment that Finco would have otherwise been required to make.
Considering the above, we hereby confirm that, subject to the conditions, limitations, qualifications and comments set out in the Ruling, as amended by this letter, the rulings given therein will continue to be binding on the Canada Revenue Agency.
Yours truly,
for Director
Financial Sector and Exempt Entities Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch