A structured convertible and specifically a variation of mandatory convertible securities that was issued by Smith Barney.

It has a payoff structure similar to PEPS (premium equity participating securities), which represent trust convertible preferred securities (CPS), which mandatorily convert into common equity (common shares) at a specific future date (e.g., within 3 years). The amount of shares required to be purchased will be equal to the purchase price of the unit (PEPS unit), while the number of shares to be received will be determined by a schedule based on the stock trading price prior to the specified date of purchase (i.e., 15 days prior to the purchase date).

Threshold appreciation price securities (TAPS) holders were entitled to receive interest payments through the final settlement date, at which time they would receive a yield-enhancement payment and all their TAPS would be converted into shares of an issuer’s common stock. Such securities were trust preferred (trust structured preferred) with mandatory conversion, backed by treasury securities.