Extract to table

This represents a significant component of the borrowers' aggregate interest expense and must be factored into the Section 163(j) business interest expense limitation analysis for TAI

The resolution of this question determines the framework within which all subsequent issues — OID, CODI, gain or loss recognition, and issue price determinations — must be analyzed

However, we note that the safe-harbor analysis must be applied in the context of the specific facts

This "phantom income" effect — in which a lender must include OID in income even though no cash is received — is a well-established feature of the OID rules and applies equally to the PIK amendment fee OID

The current cash interest expense on TAI's share of the facility (principally TLB and intercompany allocations of TLA and Revolver interest) must be aggregated with the incremental OID from the amendment fee and PIK conversion to determine whether total business interest expense exceeds the limitation

The difference between the SRPM (which includes all capitalized PIK interest through maturity) and the adjusted issue price of the instrument constitutes OID, which must be accrued over the life of the instrument using the constant yield method