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

3/7/21

WSJ.com: US Business

Your Company Might Soon Offer a Covid Vaccine
Large employers including meatpackers, airlines and pharmaceutical companies are joining the race for scarce doses of Covid-19 vaccines, looking to speed up inoculations of their employees.

Electric Vehicles Are the U.S. Auto Industry's Future---If Dealers Can Figure Out How to Sell Them
Auto executives and investors buzz about EVs, but many dealers say battery-powered cars, and even hybrid models, remain a tough sell to mainstream car shoppers.

Huawei Loses Cellular-Gear Market Share Outside China
Huawei?s share of revenue from selling wireless-equipment around the world, excluding China, fell 2 percentage points last year, a signal the U.S. campaign to curb the Chinese manufacturer is starting to make an impact.

China-Linked Hack Hits Thousands of Microsoft Customers
The cyberattack on the company?s Exchange email software is believed to have infected American businesses, government offices and schools.

The Best Password Managers and Security Tips: How to Solve Your Login Problems
Dealing with passwords is about as pleasant as cleaning gutters or filing taxes. But it is just as important. Don?t wait until someone?s stolen your identity or wiped your bank account.

February Hiring Sets Up Stronger Spring Recovery
Hiring accelerated as restaurants and other hospitality businesses reopened and coronavirus cases eased, with U.S. employers adding nearly 550,000 jobs in the first two months of the year.

Hard-Hit Industries Gain Jobs on Long Road to Recovery
Employment picked up last month for the leisure and hospitality sector, as well as retail and manufacturing, but job totals remain well below pre-pandemic levels.

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

Ocean Pacific Capital