Trust Preferred Security

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Trust Preferred Security

A security that has every feature of a debt security except for the fact that it is not actually debt. That is, TruPS have fixed coupons, a maturity date when the holder receives the face value, and an early redemption option. However, the holder does not lend the issuer money when he/she purchases a TruPS. Some companies favor TruPS to bonds and preferred stock because they are taxed like bonds but may be included as assets (and not liabilities) on a balance sheet.

References in periodicals archive ?

Two issuers selectively redeemed TruPS with a higher spread.

Fitch: U.S. Bank TruPS CDOs Combined Default & Deferral Rate Declined

TruPS are a type of hybrid security that has features of both debt and equity.

Will TruPS survive? The reputation of Trust Preferred Securities as a source of bank capital has gone from good to bad to ugly--worrying investors and banks

While the exact sale prices the FDIC obtained for its TruP securities portfolio are unknown, indications are that TruP CDO values have increased significantly from their financial-crisis lows.

Implications of the FDICs recent sale of trust-preferred CDO securities

interest deferrals, defaults and recoveries for TruPS, as well as the

Moody's requests comments on proposed updates to its approach to rating TruPS CDOs

The Redeemed TRUPS are being redeemed, along with the common securities issued by Citigroup Capital IX, Citigroup Capital XI and Citigroup Capital XVII (collectively, the "Capital Trusts") and held by Citigroup, as a result of the concurrent redemption in whole by Citigroup of the junior subordinated debt securities held by each Capital Trust which underlie the respective series of Redeemed TRUPS.

United States : Citigroup Announces $2 Billion Redemption of Trust Preferred Securities

The amount of TruPS, together with other cumulative preferred stock that a BHC could include in Tier 1 capital, was limited to 25 percent of Tier 1.

Housing market overview: challenges to the housing recovery

Applicable Criteria and Related Research: Fitch Bank TruPS CDO Default, Deferral and Cure Tables as of January 2013

Fitch: U.S. Bank TruPS CDOs Combined Default & Deferral Rate Decreases

One issuer representing USD 5m in collateral deferred interest on its TruPS in July.

US bank TruPS CDO defaults down in July

Table 1 Aggregate BHCs with TruPS Date Total number of BHCs Number of BHCs with TruPS outstanding TruPS (thousands of dollars) 2013 5,320 1.

TruPS structure

Fitch estimates there are currently 109 issuers across Fitch-rated TruPS CDOs that remain participants in the Capital Purchase Program (CPP).

Fitch: Wind-Down of TARP's CPP May Impact TruPS CDOs

The aggregate principal amount of TruPS outstanding is USD 350m.

M&T Bank launches preferred securities redemption

It is planning to redeem USD500m of TruPS at face value because according to it the Dodd-Frank Act would not allow banks to consider TruPS as regulatory capital.