The Internal Revenue Service (IRS) has issued final regulations clarifying when property will be considered publicly traded for purposes of determining the issue price of a debt instrument. The determination of the issue price of a debt instrument can have significant effects on both the issuer and the holder of a debt instrument. In particular, in the case of a debt-for-debt exchange (including a significant modification of a debt instrument), the amount of the issue price of the “new” (or modified) debt instrument is of critical importance because (1) the amount of original issue discount (OID) associated with the “new” (or modified) debt instrument is determined based on the difference between the issue price of a debt instrument and its stated redemption price at maturity, (2) the issue price is used to determine whether an issuer has (and the amount of, if any) cancellation of indebtedness income resulting from this exchange, and (3) the determination of a holder’s gain or loss from this exchange depends on whether the holder’s basis in the “old” debt instrument is greater or less than the issue price of the “new” debt instrument. As described below, the expanded definition of publicly traded property under the final regulations increases the likelihood that a debt-for debt exchange, including a significant amendment to an existing debt instrument, will result in a reduced issue price for the new debt.