Grandfathered obligation Clause Samples

Grandfathered obligation. (A) The term grandfathered obligation means— (1) Any obligation outstanding on July 1, 2014; (2) Any obligation that gives rise to a withholdable payment solely because the obligation is treated as giving rise to a dividend equivalent pursuant to section 871(m) and the regulations thereunder, provided that the obliga- tion is executed on or before the date that is six months after the date on which obligations of its type are first treated as giving rise to dividend equivalents; (3) Any agreement requiring a se- cured party to make a payment with respect to, or to repay, collateral post- ed to secure a grandfathered obliga- tion. If collateral (or a pool of collat- eral) secures both grandfathered obli- gations and obligations that are not grandfathered, the collateral posted to secure the grandfathered obligations may be determined by allocating (pro rata by value) the collateral (or each item comprising the pool of collateral) to all outstanding obligations secured by the collateral (or pool of collateral) or, if the collateral cannot be allocated pro rata to all obligations, by allo- cating all collateral to obligations that are not grandfathered and withholding to the extent required under chapter 4; and (4) Any obligation that gives rise to substitute interest (as defined in § 1.861–2(a)(7)) that arises from the payee posting a grandfathered obliga- tion described in paragraph (b)(2)(i)(A)(1) of this section as collat- eral.