Edited version of private advice

Authorisation Number: 1052057200403

Date of advice: 10 November 2022

Ruling

Subject: Interest withholding tax - coupons on notes.

Question 1

Are the Loan Notes as described in the background facts and circumstances relating to the A Group, debentures as defined in subsection 6(1) of the Income Tax Assessment Act 1936 (the "ITAA 1936") and therefore for the purposes of section 128F of the ITAA 1936?

Answer

Yes

Question 2

If the Loan Notes are debentures pursuant to subsection 6(1) of the ITAA 1936, will the issue of the Loan Notes satisfy the public offer test pursuant to subsection 128F(3) of the ITAA 1936?

Answer

Yes

Question 3

Will subsection 128F(1) of the ITAA 1936 apply such that interest paid by the Taxpayer on each Loan Note issued will not be subject to tax imposed pursuant to Division 11A of the ITAA 1936?

Answer

Yes

Question 4

Will the Taxpayer have an obligation to withhold an amount from any interest paid on a Loan Note issued pursuant to section 12-300 of Schedule 1 to the TAA by virtue of paragraph 12-300(a) of the TAA because section 128B of the ITAA 1936 applies to the interest?

Answer

No

This ruling applies for the following period:

1 July XXXX to 30 June XXXX

The scheme commences on:

1 July XXXX

Relevant facts and circumstances

1.         A Group is an Australian private corporate group established for the purposes of undertaking a business operation in Australia.

2.         The A Group consists of multiple entities, but for the purposes of this edited version, all we'll say is that it includes B entity which is incorporated in Australia.

3.         <Paragraph redacted for this edited version.>

4.         <Paragraph redacted for this edited version.>

5.         The A Group sought to raise up to $XM (AUD) through a private placement of loan notes.

6.         The A Group engaged an advisory firm to seek expressions of interest from potential investors.

7.         C entity (a XXXX XXXX XXXX) expressed interest to subscribe for the USD equivalent of $XM (AUD) of notes.

8.         C entity later executed a note subscription agreement with B entity during the relevant income year. C entity agreed to subscribe for notes for the USD equivalent of $XM (AUD) as the initial noteholder under that agreement. We summarise what we see as the important terms of this note subscription agreement in Table 1.

9.         The note subscription agreement with the initial noteholder included the following terms.

•                     The commitment is the USD equivalent of $XM (AUD).

•                     The offer to subscribe for the notes will be open for the availability period, commencing on the issue date, and ending on the earlier of X business days, or the date the notes are redeemed in full, or the commitment permanently reduced to X.

•                     Any unutilised commitments will be cancelled on the last day of the availability period.

•                     The note maturity date is X months (X years) from the initial subscription date.

•                     The cash coupon rate is X% payable quarterly in arrears, accruing daily.

•                     An additional X% will accrue daily on the note principal amount of each note on the coupon payment date.

•                     On the maturity date, the company must redeem the notes and pay or repay total outstanding amounts (being the note principal amount plus any accrued but unpaid or uncapitalised coupon and any accrued but unpaid fees) to each noteholder.

•                     The company may prepay the whole or any part of the total outstanding amount before the maturity date, subject to the terms of the note subscription agreement.

10.      The A Group expects the key terms of any subsequent note subscription agreements to be substantially the same, although they haven't been finalised yet, pending closing the full subscription proceeds.

11.      The A Group sought a further $XM (AUD) from short-listed potential investors, but this process hadn't finished when it applied for the private ruling.

12.      A Group's advisers sent invitations to X parties seeking expressions of interest to subscribe for loan notes a couple of months before C entity subscribed. A Group's advisers identified them through its existing financier relationships. All X parties are providers of private debt financing. Some focus on A Group's industry. The X parties are listed and described in Table 2 <but redacted for the purposes of this edited version>. The invitation described A Group's business and summarised the Loan Note terms. A Group's advisers requested these X parties to reply with an Expression of Interest if they wished to receive further details of the investment opportunity.

13.      A Group's advisers had meetings and telephone discussions with some of the X parties listed in Table 2. Following these meetings and discussions, some of these parties confirmed their interest in the opportunity and advised that they wished to receive a copy of the full information memorandum (we'll call it 'IM' for short) once available.

14.      A Group's directors and A Group's advisers prepared an IM containing comprehensive information on A Group's business, including its business model, property assets, capital structure, directors and management, and both historical and forecast financial information.

15.      A Group's advisers later sent a draft confidentiality agreement to each party who had expressed interest: they were required to execute it if they wished to receive a copy of the IM. At this stage, those parties were also provided with a corporate update about recent A Group developments.

16.      Some of the relevant parties told A Group's advisers that they didn't intend to pursue the investment opportunity further. They didn't execute the confidentiality agreement and weren't given a copy of the IM.

17.      One party executed the confidentiality agreement and was given a copy of the IM, but later confirmed it didn't wish to subscribe for the notes.

18.      See Table 3 for a summary of how the expression of interest and the IM explained the key terms.

19.      When A Group's advisers sent the invitation, the A Group didn't know or have any grounds to suspect that any parties listed in Table 2 were associates of entities in the A Group.

20.      When the A Group executed the note subscription agreement:

•                     C entity wasn't an associate of B entity, and

•                     it didn't know or have any reasonable grounds to suspect that any of its associates would acquire notes in B entity.

21.      Before applying for this ruling, the A Group expected that the net proceeds for the loan notes (after transaction costs) would be about $XM (AUD), assuming a full issue of the loan notes to some or all invited parties.

22.      The A Group expects that the net proceeds of the offering will be applied this way:

•                     about $XM (AUD) to acquire a freehold interest in real property

•                     further freehold and leasehold interests in real properties (or options to acquire them) to be operated by the A Group

•                     to buy assets associated with these property acquisitions.

23.      The A Group is currently considering other potential real property acquisitions.

Table 1: summary of the note subscription agreement (read with definitions)

Table 2: List of recipients <redacted for the purposes of this edited version - all are investors in private markets>

Table 3: Summary of terms, taken from the invitation to subscribe, and the IM

Relevant legislative provisions

Income Tax Assessment Act 1936

Section 6

Section 128A

Section 128B

Section 128F

Income Tax Assessment Act 1997

Section 995-1

Schedule 1 to the Taxation Administration Act 1953

Section 12-245

Section 12-255

Section 12-260

Section 12-300

Reasons for decision

In these reasons references to:

•                     unhyphenated provisions (eg, section 128F) are to the Income Tax Assessment Act 1936

•                     section 995-1 mean section 995-1 of the Income Tax Assessment Act 1997

•                     other hyphenated provisions (eg, section 12-300) are in Schedule 1 to the Taxation Administration Act 1953.

Context about withholding tax

24.      Part 2-5 of the Schedule to the Taxation Administration Act 1953 imposes PAYG withholding obligations. Division 12 lists types of payments from which you need to withhold tax. They include interest payments to overseas entities: section 12-245. They also include interest payments you derive (as a lender) in carrying on business outside Australia: sections 12-255 and 12-260. However, there's an exemption in section 12-300: relevantly, you don't need to withhold if no withholding tax is payable on the interest.

25.      Very broadly, withholding tax is a tax on interest, royalties, and dividends paid to (mostly) overseas entities. The rules are in Division 11A of the Income Tax Assessment Act 1936. We'll summarise the provisions relevant to interest.

26.      Section 128B is the operative provision assessing tax.

27.      Where the section applies to interest payments, subsection 128B(5) says that withholding tax will apply at a rate set by another act.[1] Subsections 128B(2) and 128(2A) apply section 128B to some interest payments. Very broadly:

•                     Subsection 128B(2) applies to interest derived by a non-resident, that's paid either by:

o        a resident (not carrying on business through an overseas PE) or

o        a non-resident (carrying on business through an Australian PE).

•                     Subsection 128B(2A) applies to interest derived by a resident carrying on business through an overseas PE, which is paid either:

o        by a resident (not carrying on business through an overseas PE) or

o        a non-resident (carrying on business through an Australian PE).

28.      There are exemptions in subsection 128B(3). One exemption is interest income to which section 128F applies. See subparagraph 128B(3)(h)(iv).

29.      Broadly, the exemption in section 128F is for publicly offered company debentures or debt interests. If the section applies, tax isn't payable under Division 11A: subsection 128F(2). Subsection 128F(1) applies the section to interest payments made by resident companies.[2] It applies where:

•                     the company is an Australian resident bothwhen it issued the debenture/debt interest and paid the interest

•                     for debt interests which aren't debentures, they need to be non-equity shares or syndicated loans

•                     the issue for the debenture/debt interest must pass the public offer test in subsections 128B(3) or (4).

Threshold issue: have interest payments been made to relevant entities?

30.      There's a threshold issue about whether these loan notes would attract withholding to begin with. For interest payments made by Australian residents, section 128B applies to interest payments to non-residents, or residents carrying on business through an overseas PE. This raises two questions. First, are the coupon payments under the loan notes 'interest'? Second, will potential recipients of the coupons be either non-residents, or residents carrying on business overseas?

31.      The answer to the second question seems to be 'yes'. C entity is a XXXX XXXX XXXX, so it would either be a non-resident, or a resident carrying on business overseas.

32.      We'll discuss the first question: will coupon payments under the loan notes be treated as 'interest'?

What's interest? It's compensation for lending money for a period.

33.      Interest has an inclusive definition, suggesting the word takes its ordinary meaning, as expanded by that definition.

•                     Interest isn't defined in either section 995-1 or section 6.

•                     Section 6 defines 'interest income'. Broadly, it includes interest or payments in the nature of interest in respect of money lent, credit given, or debts, unless they're returns on equity, or running a financial-type business.

•                     Subsection 128A(1AB) says that for Division 11A purposes, interest includes(among other things) amounts in the nature of interest, or reasonably regarded as substitution for interest.

•                     But the expanded meaning doesn't explain the core concept of interest.

34.      ATO guidance says that interest is broadly the price for borrowing money for a period. Two ATO rulings (TR 2002/15[3] at paragraphs 53 through 56, and TR 2002/16[4] at paragraphs 83 through 86) cite commentary and caselaw to the effect that interest is:

•                     a return or compensation for the use of money belonging or owed to another

•                     payment by time for the use of money

•                     a charge for the use or enjoyment of a principal sum for a fixed period of time

•                     a recurrent payment to secure the use of a loan for a limited term.

35.      This is consistent with ordinary and financial usage. See the definitions given by the Macquarie Dictionary,[5] Australian Oxford Dictionary,[6] and Investopedia.[7]

Are coupons on loan notes interest? Yes. They're the price B entity pays for the right to use the subscription money for the loan term.

36.      Here, B entity has issued loan notes. The subscriber must pay the face value of the note to B entity. B entity must repay the face value at maturity in X years. It must also pay:

•                     cash coupons of X%, paid for the loan term, payable quarterly in arrears, and

•                     an additional X% described as a payment-in-kind capitalised coupon accruing on the principal amount, at maturity.

37.      Investopedia describes coupons as the annual interest rate paid on a bond (or debenture), expressed as a percentage of the face value, and paid from the issue date until maturity.[8] (Very broadly, bonds are agreements to pay a debt, usually having a fixed term and a fixed interest-rate. See the Macquarie Dictionary,[9] the Australian Oxford Dictionary,[10] and Investopedia.[11])

38.      The cash coupons and capitalised coupons are both interest. The loan note agreements give B entity the use of a sum of money for X years. The coupons represent the price for the use of that money for the X-year period. That fits the ordinary and financial meaning of interest. They'd also be 'amounts in the nature of interest' under Division 11A.

39.      Therefore, payments to note holders will be caught by section 128B unless an exception applies.

Question 1

Are the Loan Notes as described in the background facts and circumstances relating to A Group, debentures as defined in subsection 6(1) and therefore for the purposes of section 128F?

Summary

40.      The notes are debentures. The ordinary and financial meaning of debentures includes documents acknowledging a debt. These notes fit that meaning: they're written agreements to pay a sum to the other party.

Detailed reasoning

41.      Debenture is a defined term. Section 6 says that debenture, in relation to a company, includes debenture stock, bonds, notes, and any other securities of the company, whether constituting a charge on the assets of the company or not. Section 995-1 gives the same definition, expanding it to cover unit trusts. Subsection 128F(9) says that in section 128F, debenture also includes a promissory note and bill of exchange. All those definitions are inclusive, so they wouldn't displace the ordinary meaning.

42.      Broadly, the ordinary and financial usage of 'debenture' is a document or certificate which acknowledges a debt. See the Macquarie Dictionary,[12] the Australian Oxford Dictionary,[13] and Investopedia.[14] Investopedia suggests a debenture often pays periodic interest payments called coupon payments. The Australian Law Dictionary[15] gives the Corporations Act definition: a legally binding undertaking to repay money deposited or lent.

43.      The words included in the expanded meaning of 'debenture' are mainly synonyms for debenture. The dictionaries we've already cited give similar meanings for 'bonds', 'notes', 'securities', 'promissory notes', and 'bills of exchange'.[16] Very broadly, these are all documents about a promise or obligation to pay a debt or monetary sum on specified terms (bonds, for example, may include paying interest). Investopedia gives similar meanings: for example, it says debentures are a type of bond, bonds and notes are similar, and securities are documents evidencing financial value. Types of securities include debt securities which include creditor relationships in the sense of owning an entity's bond.[17] For completeness, 'debenture stock' has a slightly different meaning.[18]

44.      The loan notes are debentures, both within the ordinary meaning and the expanded meaning. These loan notes are documents formalising an agreement under which B entity will pay a principal sum to the bearer on a certain date, with extra coupon payments. That fits the ordinary meaning of debentures, and also bonds, notes, securities, and promissory notes.

Question 2

If the Loan Notes are debentures pursuant to subsection 6(1) of the ITAA 1936, will the issue of the Loan Notes satisfy the public offer test pursuant to subsection 128F(3) of the ITAA 1936?

Summary

45.      The loan notes meet the public offer test in subsection 128F(3), and won't be excluded under subsection 128(5). We accept they were offered for issue to X finance-type businesses, and won't attract the exclusions for associate dealings.

Detailed reasoning

46.      Passing the public offer test is a two-stage process for debentures. First, the debentures need to be issued resulting from any of five alternative conditions listed in subsection 128F(3). Second, the debentures must not trigger excluding provisions in subsections 128F(5) and (6).

The first stage of the public offer test: the debenture issue must have resulted in circumstances meeting any of five alternative conditions. One of those conditions is where they were offered to at least X finance-type businesses.

47.      The first stage of the public offer test is that the debenture or debt interest must have been issued resulting from an offer which meets any of five alternative conditions. The opening words of subsection 128F(3) require that the issue must have resulted from the debenture or debt interest being offered for issue in circumstances set out in paragraphs (a) through (e) of that subsection. Only one of those five circumstances, in paragraph 128F(3)(a), seems relevant to the facts here, so we won't bother to list them out.

48.      That paragraph broadly requires that the issue resulted from the debenture or debt interest being offered for issue to at least X persons (not known or suspected to be associates) carrying on a finance, investment, or security dealings type business:

The issue of a debenture or debt interest by a company satisfies the public offer test if the issue resulted from the debenture or debt interest being offered for issue:

(a) to at least X persons each of whom:

(i) was carrying on a business of providing finance, or investing or dealing in securities, in the course of operating in financial markets; and

(ii) was not known, or suspected, by the company to be an associate (see subsection (9)) of any of the other persons covered by this paragraph; or

49.      We'll paraphrase some relevant and related ATO guidance.

•                     TD 1999/9[19], when discussing a superseded version of paragraph 128F(1)(c), says a debenture will be issued outside Australia if it's executed and delivered outside Australia.

•                     TD 1999/8[20] says a debenture will be taken to have 'resulted from' being 'offered for issue' if the debenture otherwise satisfies one of the tests. It explains that it may be difficult for the issuer to demonstrate whether the investor had seen the debenture announcement or not; the section was intended to ensure dissemination to markets, rather than require the offer to have caused the issue.

•                     TD 1999/24[21] broadly says 'offer' means invitation to treat, not a contractual offer. This requirement will be met if the debentures are advertised for issue or other invitations or inducements are made, with the potential to make offers. Part IVA might apply where advertisements, invitations, or inducements aren't genuine.

50.      The first condition in paragraph 128F(3)(a) is met.

•                     B entity and C entity entered a note subscription agreement about notes which qualify as debentures for section 128F purposes.

•                     A Group's advisers, acting as the A Group's agent, sent a flyer to another X parties inviting them to express interest in the notes. Applying TD 1999/24, the A Group made an invitation to treat, which is an offer in this context.

•                     All X parties can be fairly described as being in the business of providing finance, or investing in securities in the course of operating in financial markets, so subparagraph (a)(i) is met.

•                     When the A Group sent the invitations to these X parties, it didn't know or suspect that any of them were its associates, so subparagraph (a)(ii) is also met.

•                     Following TD 1999/8, we'll assume the note issue 'resulted from' the offer to ten parties, without requiring proof that the offer caused the issue.

51.      Following TD 1999/24, Part IVA might apply to contrived arrangements which had features suggesting the invitations or process wasn't genuine.

The second stage of the public offer test: the debentures mustn't trigger any exceptions. One exception is where the company had reasonable grounds to suspect that the debenture was being acquired by an associate.

52.      The public offer test won't be met where exclusions apply. Only one, in subsection 128F(5), applies to debentures. The other is for syndicated loan facilities, which isn't relevant.[22]

53.      For debentures, a debenture issue won't satisfy the public offer test if it meets three conditions in subsection 128F(5). These conditions are that the company knew or had reasonable grounds to suspect that:

•                     the debenture was being (or would be) acquired directly or indirectly by an associate

•                     that associate either is a:

o        non-resident, who didn't acquire the debenture in carrying on a business at or through a permanent establishment in Australia, or

o        a resident, who did acquire the debenture in carrying on a business at or through a permanent establishment outside Australia, and

•                     the associate didn't acquire the debenture or debt interest in its capacity as a:

o        dealer, manager, or underwriter about the placement of the debenture or debt interest, or

o        a clearing house, custodian, funds manager, or responsible entity of a registered scheme.

54.      The exception for associates won't apply because the first condition in 128F(5) isn't met. The notes were issued to C entity, and no one else has subscribed. C entity isn't an associate, and the A Group had no reasonable grounds to suspect that any of its associates would acquire notes. We don't need to discuss the other two conditions.

55.      For completeness, those other conditions seem to be met. As C entity is a XXXX XXXX XXXX, it's likely to have acquired the debenture in carrying on a business at or through a permanent establishment outside Australia. Similarly, it's unlikely to have acquired the debenture as an intermediary (eg, as a dealer, custodian, or funds manager). C entity is described as a fund, not an entity that manages funds on behalf of other entities.

Conclusion on the public offer test

56.      The public offer test is met. The debenture issue meets the first public offer condition in paragraph 128F(3)(a). The exception for debentures (applying where the company knew the debentures would be issued to associates) doesn't apply.

Question 3

Will subsection 128F(1) of the ITAA 1936 apply such that interest paid by the Taxpayer on each Loan Note issued will not be subject to tax imposed pursuant to Division 11A of the ITAA 1936?

Explanation

57.      Section 128F excludes interest from debentures or debt interests from withholding tax if specified conditions are met. Subsection 128F(1) applies to residents, while subsection 128F(1A) applies to non-residents carrying on business at a permanent establishment in Australia. To paraphrase the conditions in subsection 128F(1):

•                     the issuing company was an Australian resident when it issued the debenture (or debt interest) andwhen the interest was paid

•                     for non-debentures, the debt interests must either be non-equity shares or syndicated loans

•                     the issue of the debenture (or debt interest) must satisfy the relevant public offer test.

58.      To loosely summarise relevant extracts from definitions in section 6:

•                     companies will be residents if incorporated in Australia

•                     permanent establishment means a place at or through which the person carries on business.

59.      The conditions in subsection 128F(1) are met.

•                     B entity is (or will be) an Australian resident at the relevant times (when issuing and when paying interest) because it's incorporated in Australia.

•                     The notes are debentures, so the condition about non-equity shares and syndicated loans isn't relevant. See Question 1.

•                     The notes meet the public offer test. See Question 2.

60.      It follows that section 128F will exempt interest payments for A Group XXXX loan notes from withholding tax.

Question 4

Will the Taxpayer have an obligation to withhold an amount from any interest paid on a Loan Note issued pursuant to section 12-300 of Schedule 1 to the TAA by virtue of paragraph 12-300(a) of the TAA because section 128B of the ITAA 1936 applies to the interest?

Explanation

61.      Section 12-300 says an entity doesn't have any obligation to withhold amounts from interest if no withholding tax is payable.

62.      B entity doesn't have a withholding obligation for the interest payments under the loan notes. We concluded at Question 3 that interest payments would be exempt from withholding under section 128F. This means no withholding tax is payable, so section 12-300 applies.

[1] Currently 10% for interest: see section 7 of the Income Tax (Dividends, Interest and Royalties Withholding Tax) Act 1974 read with subsection 128B(5).

[2] Subsection 128F(1A) applies to non-resident companies - not relevant because the payer is an Australian resident.

[3] Taxation Ruling TR 2002/15 Income Tax: deductibility of payments incurred on moneys raised through the issue of perpetual notes.

[4] Taxation Ruling TR 2002/16 Income Tax: the taxation consequences for taxpayers issuing certain stapled securities.

[5] Macquarie Dictionary Publishers (2022) The Macquarie Dictionary online, (entry for 'interest') accessed at www.macquariedictionary.com.au on 28 October 2022.

[6] Oxford University Press (2004) Australian Oxford Dictionary, 2^nd edition, (entry for 'interest') accessed at www.oxfordreference.com on 28 October 2022.

[7] Investopedia (September 2022) What is interest? Accessed at www.investopedia.com on 28 October 2022.

[8] Investopedia (April 2020) Coupon Accessed at www.investopedia.com on 28 October 2022.

[9] Macquarie Dictionary Publishers (2022) The Macquarie Dictionary online, (entry for 'bond') accessed at www.macquariedictionary.com.au on 28 October 2022.

[10] Oxford University Press (2004) Australian Oxford Dictionary, 2^nd edition, (entry for 'bond') accessed at www.oxfordreference.com on 28 October 2022.

[11] Investopedia (July 2022) Bond: Financial Meaning with examples and how they are priced accessed at Investopedia.com on 28 October 2022.

[12] Macquarie Dictionary Publishers (2022) The Macquarie Dictionary online, (entry for 'debenture') accessed at www.macquariedictionary.com.au on 28 October 2022.

[13] Oxford University Press (2004) Australian Oxford Dictionary, 2^nd edition, (entry for 'debenture') accessed at www.oxfordreference.com on 28 October 2022.

[14] Investopedia (August 2022) Debenture Explained, With Types and Features,accessed at www.investopedia.com on 28 October 2022.

[15] Mann T (ed) (2018) Australian Law Dictionary, 3^rd edition, (entry for 'debenture'), accessed at www.oxfordreference.com on 28 October 2022.

[16] Macquarie Dictionary Publishers (2022) The Macquarie Dictionary online, (entries for 'bond', 'note', 'security', 'promissory note', 'bill of exchange') accessed at www.macquariedictionary.com.au on 28 October 2022; Oxford University Press (2004) Australian Oxford Dictionary, 2^nd edition, (entries for 'bond', 'note', 'security', 'promissory', 'bill') accessed at www.oxfordreference.com on 28 October 2022.

[17] Investopedia (August 2022) Debenture Explained, With Types and Features; Investopedia (February 2021) Note definition; Investopedia (June 2022) What are Financial Securities? Examples, Types, Regulation, and Importance accessed at www.investopedia.com on 28 October 2022. See also Investopedia (January 2022) Bill of Exchanged Definition: Examples and How it Works, accessed at www.investopedia.com on 31 October 2022.

[18] The Macquarie Dictionary says it's a total amount borrowed from a number of lenders, treated as a single stock rather than separate loans; the Australian Oxford Dictionary says it means 'stock comprising debentures, with only the interest secured'. See Macquarie Dictionary Publishers (2022) The Macquarie Dictionary online, (entry for 'debenture stock') accessed at www.macquariedictionary.com.au on 28 October 2022; Oxford University Press (2004) Australian Oxford Dictionary, 2^nd edition, (entry for 'debenture') accessed at www.oxfordreference.com on 28 October 2022.

[19] Taxation Determination TD 1999/9 Income tax: interest withholding tax exemption under section 128F of the Income Tax Assessment Act 1936 - if a debenture is executed and delivered outside Australia, will it be taken to have been 'issued' outside Australia for the purposes of paragraph 128F(1)(c)?

[20] Taxation Determination TD 1999/8 Income tax: interest withholding tax exemption under section 128F of the Income Tax Assessment Act 1936 - when will an issue of debentures be taken to have 'resulted from' the debentures being 'offered for issue' for the purposes of the public offer test in subsection 128F(3)?

[21] Taxation Determination TD 1999/24 Income tax: interest withholding tax exemption under section 128F of the Income Tax Assessment Act 1936 - how may a company satisfy the introductory requirements in paragraphs 128F(3)(a) and 128F(3)(b) that a debenture must be offered on a 'debenture by debenture' basis?

[22] See subsection 128F(5AA). Very broadly, a syndicated loan means a loan agreement or facility with the capacity to have multiple lenders: see subsection 128F(9) read with subsections 128F(11), (12), and (13). These loan notes aren't a syndicated loan: each noteholder must subscribe separately.

Copyright notice

© Australian Taxation Office for the Commonwealth of Australia

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).