Since 1977, we have been experts in providing financing solutions in the form of Real Estate Trust Preferred Securities (TRuPS)
Please call 1-800-595-1474
Call Us...Toll Free!

5-Star Mobile Home Parks
Apartments
Apartment Buildings
Assisted living facilities
Auto repair garages
Boutique hotels
Car dealerships
Care facilities
Car wash facilities
Casinos
Church financing
Congregate care
Drugstores
Walgreens
CVS Pharmacies
Rite Aid
Energy
Ethanol plants
Factories
Factory outlets
Franchises
Gas stations
Golf courses
Grocery stores
Hospitality
Hotels
Housing developments
Independent living facilities
Industrial parks
Land acquisitions
Manufacturing facilities
Medical facilities
Medical offices
Mini storage
Mixed use
Mobile home parks
Movie theaters
Office buildings
Offices
Parking garages
Post Offices
Private schools
Raw land
Regional malls
Residential subdivisions
Resorts
Restaurants
Retail centers
RV parks
Senior housing
Shopping centers
Ski resorts
Special use buildings
Strip centers
Student housing
Tract development
Warehouse distribution centers
Warehouses
Wineries

 
 
 

REAL ESTATE TRUST
PREFERRED SECURITIES
(TRuPS)

 

Ocean Pacific Capital has been providing 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 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.

 

Wall Street Journal
Commercial News

10/17/21

WSJ.com: US Business

Moderna Vaccine for Adolescents Delayed for FDA Review
Moderna asked the Food and Drug Administration in June to expand use of the company?s Covid-19 vaccine to 12-to-17-year-olds, but the agency has held off while it looks into the risk of myocarditis, a rare heart condition.

J&J Covid-19 Booster Shot Endorsed by FDA Advisers
A panel of outside doctors and experts voted 19-0 to recommend that all adults who received a first dose of the Johnson & Johnson vaccine should get the second dose at least two months later.

California Scrambles to Find Electricity to Offset Plant Closures
The state is contending with the coming loss of gas-fired power plants and its last remaining nuclear facility in a planned transition to renewable energy.

Three Years After First 737 MAX Crash, Fallout Continues for Boeing and Victims
The indictment of a former technical pilot is first time an individual has faced charges related to the accidents. The company previously reached a $2.5 billion settlement with the government.

Today's Tech Founders Don't Just Own the Company. They're Also Getting Huge Pay Packages.
Startup creators once tended to take little or no remuneration as CEOs. Now, some are getting giant stock awards, making them among America?s best-compensated corporate chiefs.

Inflation Sets Off Alarms Around the World
More than a dozen central banks have raised interest rates but two that haven?t are those that loom largest over the global economy: the Federal Reserve and the European Central Bank.

Largest Cities Had Some of the Lowest U.S. Inflation Rates
New York City, Los Angeles and Chicago were below the national level in September while rural areas grappled with increases in gasoline and vehicle prices.

BRE #:00619059
Charles Elfsten, President
Charles A. Elfsten
Top| Contact| Privacy| Licensing| Site Map| Resources
DESIGNED AND
POWERED BY

Ocean Pacific Capital