Trust Preferred Stock Units

Company-issued bonds that have been repackaged by an underwriter into $25 pieces that are sold to individual investors. These securities possess characteristics of both equity and debt securities. Brokerage firms create this product and give them their own name and acronym, such as CorTS, CTBCSs, and SATURNS. TruPS receive their dividends before common and preferred stockholders; however, many have a clause that allows interest payments to be deferred up to five years.