Canadian Originated Preferred Securities - COPrS

A long-term subordinated debt instrument issued in Canada. COPrS (pronounced "coppers") are a type of derivative equity security invented by Merrill Lynch in the mid-1990s. The first company to offer them was TransCanada PipeLines. COPrS are not the same as preferred shares, but are attractive because they have features which resemble both preferred shares and long-term corporate bonds.

COPrS are a form of long-term, unsecured debt that are rated like bonds. They are traded on the Toronto Stock Exchange and pay interest quarterly, though the issuer usually has the option to defer paying interest for as many as 20 consecutive quarters. COPrS can be called after five years, so they are subject to reinvestment risk. Their subordinate status adds another level of risk, but also they offer a higher yield, and they are taxable investments.