Certificate Of Participation

Definition

A Certificate Of Participation is a Municipal Security evidencing a pro-rata share in a specific pledged revenue stream, usually lease payments by the 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.