Glossary of Municipal Securities Terms

CERTIFICATE OF PARTICIPATION (COP)

An instrument evidencing a pro rata share in a specificĀ pledged revenue stream, usually lease payments by theĀ issuer that are typically subject to annual appropriation. The certificate generally entitles the holder to receive a share, or participation, in the payments from a particular project. The payments are passed through the lessor to the certificate holders. The lessor typically assigns the lease and the payments to a trustee, which then distributes the payments to the certificate holders. See: ABATEMENT CLAUSE; LEASE-PURCHASE AGREEMENT; NON-APPROPRIATION CLAUSE; MUNICIPAL SECURITIES. Compare: LEASE RENTAL BOND.

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