Omri Y. Marian & Andrew D. Moin (both of Sullivan & Cromwell, New York), Taxation of Structured Debt in a Low-Rate Environment, 135 Tax Notes 323 (Apr. 16, 2012):

Low market rates call for special types of debt instruments. This report discusses the tax questions presented by several of those instruments, including fixed-to-floating rate instruments, range accrual debt instruments, and callable step-up instruments. The authors note several ambiguities in the regulations regarding variable-rate and contingent payment debt instruments and call for clarification. They also explore some counterintuitive results of the technical operation of the regulations and argue that a possible explanation may be that the regulations were drafted during times of different market characteristics.

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