Series 50: Certificates Of Participation (COPs)

Certificates of Participation (COPs)

Certificates of participation are a mechanism for governmental entities to finance capital projects without technically issuing long-term debt. They are a type of financing in which the investor purchases a share of the lease revenue from a facility rather than a bond.

The leasing authority leases the asset to a municipality and transfers its right to receive lease payments to a trustee. The trustee executes certificates of participation, which are sold to members of the public. The purchaser of a certificate of participation receives a share of the lease payments, rather than the principal and interest of a bond. COPs are financing lease agreements, in the form of securities, sold to investors in both private placements and public offerings.

Leases generally are not considered debt, because the government’s ob