In recent months, the deep discounts at which bonds and bank debt have been trading and the difficulty of meeting various financial covenants have caused many companies to consider repurchasing (or modifying the terms of) their debt.  However, some companies have been deterred by concerns about creating taxable cancellation of debt (COD) income as a result.  This client update addresses provisions of the Stimulus Bill which (if enacted) would allow companies to defer COD income and include that income over a five-year period beginning in 2014.