PUBLIC LAW 103-66—AUG. 10, 1993 107 STAT. 507 "(ii) any other type of contingent interest that is identified by the Secretary by regulation, where a denial of the portfolio interest exemption is necessary or appropriate to prevent avoidance of Federal income tax. "(B) RELATED PERSON. —The term 'related person' means any person who is related to the debtor within the meaning of section 267(b) or 707(b)(l), or who is a party to any arrangement undertaken for a purpose of avoiding the application of this paragraph.
- (C) EXCEPTIONS. — Subparagraph (A)(i) shall not apply
to— "(i) any amount of interest solely by reason of the fact that the timing of any interest or principal payment is subject to a contingency, "(ii) any amount of interest solely by reason of the fact that the interest is paid with respect to nonrecourse or limited recourse indebtedness, "(iii) any amount of interest all or substantially all of which is determined by reference to any other amount of interest not described in subparagraph (A) (or by reference to the principal amount of indebtedness on which such other interest is paid),
- (iv) any amount of interest solely by reason of
the fact that the debtor or a related person enters into a hedging transaction to reduce the risk of interest rate or currency fluctuations with respect to such interest, "(v) any amount of interest determined by ref- erence to—
- (!) changes in the value of property (including
stock) that is actively traded (within the mecming of section 1092(d)) other than property described in section 897(c)(1) or (g), (II) the yield on property described in subclause (I), other than a debt instrument that pays interest described in subparagraph (A), or stock or other property that represents a beneficial interest in the debtor or a related person, or "(III) changes in any index of the value of property described in subclause (I) or of the yield on property described in subclause (II), and "(vi) any other type of interest identified by the Secretary by regulation. "(D) EXCEPTION FOR CERTAIN EXISTING INDEBTED- NESS.—Subparagraph (A) shall not apply to any interest paid or accrued with respect to any indebtedness with a fixed term— "(i) which was issued on or before April 7, 1993, or "(ii) which was issued after such date pursuant to a written binding contract in effect on such date and at tdl times thereafter before such indebtedness was issued." (2) Subsection (c) of section 881 is amended by redesignat- 26 USC 881. ing paragraphs (4), (5), and (6) as paragraphs (5), (6), and
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