Trust Preferred Securities - TruPS

DEFINITION of 'Trust Preferred Securities - TruPS'

A security similar to debentures and preferreds that is generally longer term, has early redemption features, makes quarterly fixed interest payments, and matures at face value.

BREAKING DOWN 'Trust Preferred Securities - TruPS'

TruPS have been created by companies for their favorable accounting treatments and flexibility. Specifically, these securities are taxed like debt obligations by the IRS while maintaining the appearance of equities in a company's accounting statements as according to GAAP procedures.

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RELATED FAQS
  1. What are the differences between preference shares and debentures?

    Learn why preference shares are equity securities and debentures are debt securities. Understand the differences between ... Read Answer >>
  2. How is a debenture stock different from a regular debenture?

    Learn to differentiate between standard debentures and debenture stocks, which are equities that act more like preferred ... Read Answer >>
  3. What is the difference between nonconvertible debentures and fixed deposits?

    Debentures and fixed deposits are two different ways of investing money. A debenture is an unsecured bond. Essentially, it ... Read Answer >>
  4. What is the difference between a debenture and a bond?

    Learn how to differentiate between debentures and bonds, two types of debt securities that can be issued by a government ... Read Answer >>
  5. What legal recourse do I have if the counterparty in a debenture agreement does not ...

    Understand the risks and benefits of debenture agreements, and what legal recourse you have should the other party fail to ... Read Answer >>
  6. Why do preferred stocks have a face value and why is it different than market value?

    Read about the differences between the face value and market value of a preferred stock, including why preferred stocks often ... Read Answer >>
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