What is ‘Quarterly Income Preferred Securities – QUIPS’
Shares that are an interest in a limited partnership that exists solely for the purpose of issuing preferred securities and lending the proceeds of the sales to its parent company. They usually have a $25 par value, NYSE listing and cumulative quarterly distributions.
Explaining ‘Quarterly Income Preferred Securities – QUIPS’
QUIPS are an example of hybrid securities, combining features of preferred stock and corporate bonds. Hybrids can pay a higher rate of return than preferred stock because dividends are paid with pretax dollars and, therefore, they generate a sizable tax break for corporations.
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- Why Don't All Banks Practice Regulatory Arbitrage? Evidence from Usage of Trust Preferred Securities – papers.ssrn.com [PDF]
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