What does a Certificate of Participation (COP) provide investors?

A Certificate of Participation (COP) is a financing mechanism that allows investors to participate in the revenue stream generated by a governmental project. When investors purchase COPs, they are essentially buying a share of the future income or revenue that the project will generate, which is typically derived from lease payments, fees, or other income sources related to the project.

The focus of COPs is on providing investors with a share in the income generated rather than ownership of assets or rights to purchase equity. This structure is particularly useful for municipalities and government entities, as it allows them to fund capital projects without needing to issue traditional debt or bonds.

While other options reference benefits or rights associated with investments, they do not accurately describe the nature of COPs. The emphasis is on income participation rather than ownership of assets, tax benefits, or equity purchase rights. This reinforces the understanding that COPs are primarily about sharing in the income stream of the financed project.