Fixed-Rate Capital Security

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Fixed-Rate Capital Security

A security that combines features of bonds and preferred stock. Fixed-rate capital securities provide the holder with a fixed coupon with payments on a regular basis, and like bonds, these coupons are tax deductible for the issuer. Likewise, most have a maturity date and are fairly liquid. However, like preferred stock, the issuer may suspend payments on fixed-rate capital securities when it is having cash flow problems, though only if it also stops all dividend payments on stock. Because of these features, fixed-rate capital securities are fairly low risk investments.
References in periodicals archive ?
s (AGL) $660 million medium-term notes are affirmed at `A' and AGL Capital Trust's $75 million fixed-rate capital securities at `BBB+' by Fitch IBCA.
s (AGL) implied senior unsecured rating is downgraded to `BBB+' from `A-` and its $75 million fixed-rate capital securities, issued by AGL Capital Trust, to `BBB' from `BBB+'.
s (AGL) $660 million medium-term notes are affirmed at 'A' and AGL Capital Trust's $75 million fixed-rate capital securities at 'BBB+' by Fitch IBCA.
s (AGL) implied `A-' senior debt rating and $75 million `BBB+' fixed-rate capital securities (issued by AGL Capital Trust) on RatingAlert Negative.
The market practice initiatives underway include a new set of proposed guidelines for yield calculations and disclosure for fixed-rate capital securities.
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