A corporation repaid an unsecured debenture with surplus cash and by drawing down on a revolving line of credit. Did the exclusion in s. 18(9.1)(a), for the substitution of one debt obligation by another, apply? The Directorate responded:
[I]n order for there to be such a substitution for the purposes of subsection 18(9.1), there must be a substitution between the creditor and the debtor of another obligation for the original obligation.
… [Here] there was no replacement of the original obligation by another obligation between the Corporation and the debenture holders. In fact, the Corporation repaid the debenture holders. The fact that the Corporation financed, at least in part, the payment of the debentures through a revolving credit facility with financial institutions, which are persons other than the debenture holders, does not constitute the substitution of one debt by another.