Company: TCPA
Filing Date: 2025-02-20
Form Type: SUPPL
Source: 0001193125-25-030844
Chunk: 17

Company: TRANSCANADA PIPELINES LTD
Filing Date: 2025-02-20
Form: SUPPL
Chunk 17
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 federal income tax consequences to Noteholders.

If we exercise our option to defer the payment of interest on the Notes, pursuant to certain applicable U.S. Treasury regulations, we expect
to treat the Notes as if they had been redeemed and reissued solely for OID (as defined in “Certain U.S. Federal Income Tax Considerations”) purposes. Accordingly, all remaining interest payments on the Notes (including interest on
deferred interest) could be treated as OID, which a U.S. holder (as defined in “Certain U.S. Federal Income Tax Considerations”) would be required to accrue and include in taxable income on a constant yield basis over the remaining
term of the Notes, without regard to the time interest is actually paid on the Notes and without regard to such U.S. holder’s regular method of accounting for U.S. federal income tax purposes. The amount of OID income includible in such U.S.
holder’s taxable income would be determined on the basis of a constant yield method over the remaining term of the Notes, and the actual receipt of future payments of stated interest on the Notes would no longer be separately reported as
taxable income. The total amount of OID related to the deferred payments that would accrue during the deferral period would be approximately equal to the amount of the cash payment due immediately following the end of that period. Any OID included
in income would increase such U.S. holder’s adjusted tax basis in its Notes, and its actual receipt of cash interest payments would reduce that adjusted tax basis. Accordingly, if a U.S. holder sells a Note during a Deferral Period, although
such U.S. holder will not receive any of the interest that accrued on that Note during the Deferral Period, such U.S. holder will be required to report any OID accrued while it held such Note as income for U.S. federal income tax purposes. See
“Certain U.S. Federal Income Tax Considerations”.

Further, if the likelihood of our exercise of the option to defer the
payment of interest on the Notes were determined not to be “remote” within the meaning of applicable U.S. Treasury regulations, the Notes could be treated as issued with OID at the time of issuance and all stated interest would be treated
as OID as long as the Notes are outstanding. We believe the likelihood that we exercise such option is remote. Accordingly, a U.S. holder generally will be required to recognize any stated interest as ordinary income in the manner described under
“Certain U.S. Federal Income Tax Considerations