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.

 



Daily Oil & Gas and Wall Street Journal News
9/21/17

Glencore Strikes Multi-Year Purchase Deal With Angola LNG
Posted on Tuesday September 19, 2017

Glencore is to buy LNG supplies from Angola LNG over a multi-year period.

WoodMac: LNG Growth To Propel Oil And Gas Industry's Carbon Emissions
Posted on Tuesday September 19, 2017

LNG will be the biggest source of carbon emission growth for the world's top oil and gas companies by 2025, according to a new study by Wood Mackenzie.

Robust Asia Demand Drives ME, Russia Crude Premiums To Multi-Month Highs
Posted on Tuesday September 19, 2017

Spot premiums for Middle East and Russian crude loading in November and December have hit multi-month highs.

EIA: US Crude Inventories Up Again, Gasoline, Diesel Stocks Down
Posted on Tuesday September 19, 2017

US crude oil stockpiles jumped last week as imports and production increased, while distillate inventories fell the most in nearly six years and gasoline inventories also declined.

Dominican Republic Shuts Most Ports Ahead Of Hurricane Maria
Posted on Tuesday September 19, 2017

Dominican Republic closed most of its ports ahead of Hurricane Maria, the government says.

Anadarko To Spend $2.5B On Massive Share Buyback
Posted on Tuesday September 19, 2017

Anadarko says it would spend $2.5 billion to buy back its own stock.

Oil Up 2% Despite US Crude Build; Set For Best 3Q Since 2004
Posted on Tuesday September 19, 2017

Oil prices settled up 2% despite a rise in US crude inventories.

Advanced Communication Crucial to Quashing Protesters
Posted on Tuesday September 19, 2017

Armed with scare tactics and social media, professional pipeline protesters are requiring the energy industry to use advanced communication to silence their claims.

Petrobras CEO Says Transfer Of Rights Talks Still Ongoing
Posted on Tuesday September 19, 2017

It is unclear when talks will conclude with the government on a revaluation of stakes in offshore oil blocks known as 'Transfer of Rights' areas, a Petrobras executive says.

Two Big Words Show Why US Oil May Finally Be Turning a Corner
Posted on Tuesday September 19, 2017

Oil futures in New York have been stuck in glut mode, but that may be starting to change.

Wall Street Journal
Commercial News

9/21/17

WSJ.com: Commercial Real Estate

NYC's Pearl River Mart Will Expand to Chelsea Market
Pearl River Mart, once a casualty of skyrocketing retail rents, is planning to open another 3,500 square-foot store at Chelsea Market in Manhattan.

Office Spaces Focusing More on Communal Areas
Businesses are beginning to design offices spaces that are increasing the amount of square footage per employee when shared work settings are taken into account.

Chocolate Giant Ferrero to Look for Innovation at Cornell Tech
Ferrero, Italian manufacturer of sweets and chocolates, is setting up an innovation outpost at Cornell University?s technology campus on Roosevelt Island in New York City.

Shortage of Industrial Space on Long Island Squeezes Tenants
Long Island?s shrinking industrial space has placed expanding tenants in a tough spot, forcing them to look east to Suffolk County and off the island entirely, according to real-estate services firm JLL.

Supermarkets Face a Growing Problem: Too Much Space
A massive build-out by retailers has left the country piled up with grocery shelves as consumers shift from big weekly shopping trips to more snacking and to-go meals.

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.

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

Ocean Pacific Capital