Quarterly Income Preferred Securities (QUIPS)

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.

Further Reading

  • MIPs, QuiPs and TOPrs: old wine in new bottles – onlinelibrary.wiley.com [PDF]
  • Innovation in preferred stock: Current developments and implications for financial reporting – meridian.allenpress.com [PDF]
  • Why don't all banks practice regulatory arbitrage? Evidence from usage of trust-preferred securities – academic.oup.com [PDF]
  • Raising capital using monthly income preferred stock: Market reaction and implications for capital structure theory – www.jstor.org [PDF]
  • Debt-equity hybrid securities – www.jstor.org [PDF]
  • Why Don't All Banks Practice Regulatory Arbitrage? Evidence from Usage of Trust Preferred Securities – papers.ssrn.com [PDF]
  • Trust‐Preferred Securities and Insurer Financing Decisions – onlinelibrary.wiley.com [PDF]
  • Bank capital structure, regulatory capital, and securities innovations – papers.ssrn.com [PDF]
  • Bank capital structure, regulatory capital, and securities innovations – www.jstor.org [PDF]