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through September 1986 included the accounts receivable that were
listed in the assignment document.
Petitioner did not send a letter notifying the account
debtors of the execution of the assignment document, nor did
petitioner file financing statements, as that term is defined in
the Uniform Commercial Code. During the period the Euronotes
were outstanding, petitioner engaged in no borrowing transactions
in which any of its accounts receivable were pledged to an
unrelated third party or otherwise subject to a security interest
of an unrelated third party. The balance of the accounts
receivable at all times relevant herein exceeded $28 million.
Finance received annual interest payments in 1982, 1983,
1984, and 1985 in the amount of $12,775,000 from petitioner.
Finance made annual interest payments in the amount of
$12,075,000 in 1982, 1983, 1984, and 1985 to the holders of the
Euronotes. Finance's aggregate income on the spread between the
Euronote interest and the interest on petitioner's note was
$2,800,000. In addition, Finance earned interest income on its
investments (exclusive of interest paid by petitioner on its
note).
On October 10, 1985, petitioner repaid its note plus accrued
interest and early payment premium to Finance. The payment
consisted of $70 million in principal, $12,775,000 in interest
for the period ending October 15, 1985, and a $1,050,000 call
premium. On October 15, 1985, Finance redeemed the Euronotes by
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