CRA rules on subordinated notes with a mandatory conversion event

CRA provided rulings on interest being deductible and not being considered participating debt interest respecting subordinated notes with conventional terms other than that, on a redacted specified event (presumably respecting a shaky financial condition, as defined), the notes would be automatically converted into preferred shares based on a pre-determined conversion ratio. This fixed conversion ratio is different from 2014-0523691R3, where there was conversion into a formula quantity of common shares, but this made no difference. Here there was a similar statement in the summary that:

The borrower-lender relationship will continue to exist until such time as a [mandatory conversion event] occurs or until such time as it is or it became apparent the [mandatory conversion event] would occur.

Neal Armstrong. Summaries of 2016 Ruling 2015-0602711R3 under s. 20(1)(c)(i) and s. 212(3) - participating debt interest.