2003 Ruling 2002-0177363 - Loss Utilization in a Related Group -- summary under Paragraph 20(1)(c)

"It is no longer necessary for the dividend rate on the preferred shares to be greater than the interest rate on the loan (a so-called 'positive' spread), as had been customary in our previous loss utilization rulings. In this ruling, there is a 'negative' spread, that is, the dividend rate on the preferred shares is less than the interest rate on the loan. The dividend rate will, however, reflect an appropriate commercial rate considering the specific circumstances."