What are TRUPS how do they work?

readytoretire answered 10 months ago …

TRuPS are trust preferred securities are cumulative preferred stock issued by bank holding companies typically through a special purpose vehicle. For the issuer (a bank holding company), TruPS combine benefits of both debt and equity. It gets the equity part by being considered Tier 1 capital for the bank. The debt side is that the dividend is considered a tax expense, unlike preferred stock, where the dividend is not a tax expense. It acts like stock in that it doesn't dilute the voting shares.
They are normally issued for a long term (30 yr) and pay quarterly dividends(usually). They have been put into CDOs along with other debt.