Certificate Of Participation

certificate of participation (COP)

Entitlement to a participation, or share in the lease payments from a particular project. The lessor generally assigns lease payments to a trustee that distributes the payments to certificate holders.

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Certificate Of Participation

An investment in which the investor purchases the right to a share of a municipality's or government entity's lease revenues, instead of a bond secured by those revenues. Government entities issue COPs to avoid limitations on debt legally placed upon them. This is roughly a government entity's equivalent to accounts receivable financing. In the United States, the organizations issuing or guaranteeing COPs are Ginnie Mae, Fannie Mae, Freddie Mac, and Sallie Mae. They are also called participation certificates or PCs. See also: Lease revenue bond.