Michael J. Feder & David H. Shapiro (both of PriceWaterhouseCoopers, Washington, D.C.) have published Hoover Hedging With Dual-Currency Debt Instruments, 106 Tax Notes 949 (2005), also available on the Tax Analysts web site as Doc 2005-2264, 2005 TNT 35-34.  Here is the Introduction:

Corporate treasurers routinely execute transactions to manage currency risk exposure arising from equity investments in foreign subsidiaries. Those transactions are typically entered into to protect a company’s balance sheet from the risk that fluctuations in foreign currency exchange rates will affect, either positively or negatively, the translated value of a company’s foreign equity investment. Those transactions are frequently referred to by tax professionals as "Hoover hedges" (named for the case in which the Tax Court concluded that they are not appropriately characterized as "hedging transactions" for U.S. tax purposes).  Hoover hedging does not give rise to the typical character issues ordinarily associated with transactions failing to achieve status as a hedging transaction for tax purposes because those transactions are generally § 988 transactions that give rise to ordinary income or expense. As a result, tax considerations do not often play a significant role in the manner is which these transactions are structured.

The thesis of this article is that new Treas. reg. § 1.988-63 may provide a tax-efficient means of structuring currency hedges of net equity investments in foreign subsidiaries which, under certain circumstances, is preferable to more traditional techniques for hedging such currency risks. This article is divided into four parts. Part I contains an overview of the economics and tax treatment of typical Hoover hedges. Part II contains a description of the mechanics of Treas. reg. § 1.988-6. Part III contains two comprehensive examples that analyze the U.S. Federal income tax treatment of dual-currency debt instruments (hereinafter sometimes referred to as DCDs) used as Hoover hedges under Treas. reg. § 1.988-6.