SECTION 3. SCOPE

This revenue procedure applies to the substitution of new debt for old debt if all of the following conditions are satisfied:

(1) Debt instruments from a single new issue (“new debt”) are substituted for debt instruments from two or more outstanding issues of debt (“old debt”) (It is not necessary, however, for any single holder of the old debt to have held debt instruments from more than one of the outstanding issues.); or

(2) Debt instruments issued in a qualified reopening (as defined in

.01 Either—

§ 1.1275–2) (“new debt”) are substituted for debt instruments from one or more outstanding issues of debt (“old debt”).

.02 The substitution does not result in a significant modification of the old debt under § 1.1001–3 and, therefore, is not a realization event under § 1.1001–1. This determination may be made either on–

(1) the substitution date, or (2) the date that is two business days before the date on which the substitution offer commences, provided that date is no more than 30 business days before the date on which the substitution offer ends.

.03 The new debt and the old debt are publicly traded (within the meaning of § 1.1273–2(f)). If the new debt is issued in a qualified reopening of an outstanding issue of debt, that outstanding issue was also publicly traded.

.04 The old debt was issued at par, at a premium, or with less than a de minimis amount of original issue discount (within the meaning of § 1.1273–1(d)).

.05 The new debt is issued at par or with less than a de minimis amount of original issue discount or premium. For purposes of this condition, the issue price of the new debt is determined under § 1.1273–2 (rather than under § 1.1275–2 (j)), and the de minimis amount for premium is determined using the principles of § 1.1273–1(d). .06 Neither the new debt nor the old debt is—

(1) a contingent payment debt instrument (within the meaning of § 1.1275–4),

(2) a tax-exempt obligation (as defined in § 1275(a)(3)), or

(3) a convertible debt instrument (within the meaning of § 1.1272–1(e)).

.07 All payments on the old debt and the new debt are denominated in, or determined solely by reference to, U.S. dollars, and the functional currency of the business unit issuing the new debt is the U.S. dollar.

.08 The issuer and one or more holders of the old debt make the election provided in section 4.01 of this revenue procedure.