This newsletter discusses U.S. Federal Income tax issues that affect the capital markets and financial products arena. Specifically, this issue of Tax Talk covers:

1. The status of exchange traded notes as tax favored investment vehicles;

2. A tax review of Hybrid instruments and a survey of recent mega deals;

3. The tax treatment of structured notes; and,

4. Specific issues regarding structured foreign tax credits, variable prepaid forward contacts, and sovereign exemption.