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 ?
The Trust Preferred Securities are held only in book-entry form through The Depository Trust Corp.
The final rule addresses supervisory concerns, competitive equity considerations, and the accounting for trust preferred securities.
The proposed revisions address supervisory concerns, competitive equity considerations, and recent changes in accounting for trust preferred securities under generally accepted accounting principles (GAAP).
However, the proposal would not affect the way BHCs account for trust preferred securities on their regulatory reports filed with the Federal Reserve.