Since 1977, we have been experts in providing financing solutions in the form of Real Estate Trust Preferred Securities (TRuPS)
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REAL ESTATE TRUST
PREFERRED SECURITIES
(TRuPS)

 

Ocean Pacific Capital has been providing the best Commercial Real Estate financing for clients since 1977. We have extensive experience in providing financing solutions in the form of Real Estate Trust Preferred Securities (TRuPS). Real Estate Trust Preferred Securities or TRuPS for short are similar to debentures and preferreds that is generally longer term, has early redemption features, makes quarterly fixed interest payments, and matures at face value.

Trust preferreds have been created by companies for their favorable accounting treatments and flexibility. Specifically, these securities are taxed like debt obligations by the IRS, while having many characteristics of equities. They are recorded as debt in a company's accounting statements as according to GAAP procedures, but may be treated as capital for regulatory purposes.Because the interest paid to the trust is tax deductible, the company may enjoy a significantly lower cost of funding.

They offer many advantages over other funding choices including equity or secured/unsecured debt. They are cost effective and typically will improve ROE if used as a substitue for equity. Also the issuer can pick from a variety of pricing alternatives and have efficient execution time, with no marketing or SEC registration requirements.

Trust preferred securities (TRuPS) are cumulative preferred stock issued by bank holding companies through a special purpose vehicle. For the issuing bank holding company, TruPS combine benefits of both debt and equity.

The special purpose vehicle is wholly owned by the bank holding company and is usually a trust. It sells the TruPS to investors and uses the proceeds to purchase a subordinated note from the bank holding company. This becomes its sole asset, and cash flows from the note largely mirror the dividends payable on the TRuPS. The note has an initial maturity of at least 30 years. Dividends are paid quarterly or semi-annually. Dividends may be deferred for at least five years without creating an event of default or acceleration.

From a tax standpoint, TRuPS have a significant advantage over the direct issuance of preferred shares. This is because dividends on preferred shares are not deductible as a business expense, but interest on a subordinated note is. In this regard, the TRuPS behaves like debt. In another regard, it behaves like equity. In 1996, the Federal Reserve ruled that up to 25% of a bank holding companies tier 1 capital may comprise TRuPS or directly-issued preferred stock. In 2005, the Fed reaffirmed this treatment of TRuPS after FASB modified the accounting treatment of TRuPS under GAAP.

Initially, TRuPS were only issued by larger bank holding companies. This changed in 2000, when several institutions issued TRuPS, which were pooled in a CDO. Since then, the TRuPS CDO market has grown dramatically and has become a significant source of capital for small and medium sized bank holding companies. Contact one of our best TRuPS specialists today for a free consultation at 1-800-595-1474 or fill out a simple information request form.

 


Whatever your financing needs,
we will tailor a loan that's right for you.

 
 
 



Daily Oil & Gas and Wall Street Journal News
6/23/17

Oil in Bear Market Declines for Fifth Week as Supply Climbs
Posted on Thursday June 22, 2017

"It's becoming bearish mania," said one analyst.

Greece Approves Offshore Applications by Total-ExxonMobil, Energean
Posted on Thursday June 22, 2017

Greece approved applications submitted by a consortium of Total, ExxonMobil and Hellenic Petroleum, its energy ministry said.

Argentina's YPF Says Technology Lowering Its Shale Costs
Posted on Thursday June 22, 2017

Loma Campana is the first productive field in Argentina's Belgium-sized Vaca Muerta shale formation.

US Drillers Add Oil Rigs for Record 23rd Week in a Row -Baker Hughes
Posted on Thursday June 22, 2017

U.S. energy firms added 11 oil rigs in the week of June 23, Baker Hughes said Friday.

Kemp: Oil Market Flashes Warning About Stock Levels in 2018
Posted on Thursday June 22, 2017

The emergence of a large contango implies many hedgers and speculators now expect stocks to remain higher than before.

Petrobras Revives Plan for IPO of Fuel Distribution Unit
Posted on Thursday June 22, 2017

Petrobras' CEO said the company is reviving an initial public offering of its fuel distribution unit to cut its debt.

Russia's Novatek Aims Topple Qatar from LNG Top Spot
Posted on Thursday June 22, 2017

Qatar and Russia have long been rivals in global gas markets.

Gazprom Smells Opportunity as UK's Biggest Gas Store Shuts
Posted on Thursday June 22, 2017

While Britain's import needs are mostly met by Norway, it also receives Russian fuel indirectly through pipelines.

Four of Canada's Biggest Banks Are Key Trans Mountain Lenders -Filings
Posted on Thursday June 22, 2017

Energy infrastructure projects in Canada have faced opposition from environmental groups and aboriginal communities.

China, India, Japan Hamper Asia Oil Demand Growth
Posted on Thursday June 22, 2017

Faltering demand growth in key Asian crude importers is further hampering efforts to restore market balance.

Wall Street Journal
Commercial News

6/23/17

WSJ.com: Commercial Real Estate

Excuse Me, You're Blocking My Sun
Australia?s rapid embrace of rooftop panels?now installed on one in four homes in some areas?has collided with another hot spot of investment, construction of apartments and homes.

1031 Exchange Real Estate Tax Break Faces Extinction
A much-loved tax advantage in the commercial real-estate industry is on the chopping block even as chances dim for the passage of a broad federal tax overhaul this year.

Mall Tenants Play Hardball In Lease Negotiations
Retailers, food and beverage operators and department store chains looking to renew their leases have been asking for more allowances from mall owners.

Mall Project Denied on Former Shea Stadium Site
New York?s highest court on Tuesday blocked the development of a billion-dollar shopping mall on a Citi Field parking lot in Queens, affirming a ruling that the project needs legislative approval to proceed.

New Jersey Landlords Sweeten Perks With Ride-Hailing Subsidies
Food trucks and fitness centers are among the amenities that New Jersey office landlords have been using to attract tenants.The latest perk: Subsidies for digital ride-hailing services such as Uber and Lyft.

McCourt Global Puts Money Into Modular Construction
One of New York City?s most prominent investors is betting on modular construction. McCourt Global led a group of investors in a $6 million round of funding for Brooklyn company FullStack Modular LLC.

Owners of Two Connected Midtown South Buildings Refinance Property
The owners of two connected Midtown South Buildings have secured $430

BRE #:00619059
Charles Elfsten, President
Charles A. Elfsten
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