Company: TCPA
Filing Date: 2025-02-20
Form Type: SUPPL
Source: 0001193125-25-030844
Chunk: 44

Company: TRANSCANADA PIPELINES LTD
Filing Date: 2025-02-20
Form: SUPPL
Chunk 44
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 will not be treated as contingent payment debt instruments. Prospective U.S. holders are encouraged to consult their own tax advisors
regarding the possible application of the contingent payment debt instrument rules to the Notes.

Stated Interest

We have the option under certain circumstances to defer payments of stated interest on the Notes. Under the U.S. Treasury regulations relating
to original issue discount (“OID”), a debt instrument is deemed to be issued with OID if there is more than a “remote” contingency that periodic stated interest payments due on the instrument will not be timely paid. We
believe the likelihood that we exercise such option is remote within the meaning of the U.S. Treasury regulations in part due to the Dividend Stopper Undertaking.

S-30

Based on the foregoing, we intend to take the position that the likelihood of the exercise
of the option to defer payments of stated interest on the Notes should not result in the Notes being issued with OID. Our determination regarding the remoteness of such exercise is binding on a U.S. holder, unless such U.S. holder discloses its
contrary position in the manner required by applicable U.S. Treasury regulations. Our determination is not, however, binding on the IRS, and no assurance can be given that the IRS will not assert, or a court would not sustain, a contrary position.
If the likelihood of such exercise was determined not to be remote, the Notes would be treated as issued with OID and all stated interest would be treated as OID as long as the Notes are outstanding. In that case, a U.S. holder would be required to
accrue interest income on the Notes on an annual basis under a constant yield accrual method regardless of their regular method of accounting for U.S. federal income tax purposes. The remainder of this discussion assumes that the Notes will not be
treated as issued with OID solely as a result of us having the option under certain circumstances to defer payments of stated interest on the Notes. Moreover, it is expected, and assumed for purposes this discussion that, the Notes will be issued
with less than a de minimis amount of OID for U.S. federal income tax purposes.

Payments of qualified stated interest on a Note
(including any additional amounts paid in respect of withholding taxes and without reduction for any amounts withheld) will be includible in the gross income of a U.S. holder as ordinary interest income at the time such payments are received or
accrued, in accordance with such U.S. holder’s regular method of accounting