floating-rate preferred stock

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Floating-Rate Preferred Stock

A preferred stock paying a dividend that varies from time to time. Usually, the dividend rate is the same as the interest rate on a Treasury security. They may also be backed by mortgages or mortgage-backed securities. Floating-rate preferred stocks tend to have stable prices because a drop in the common share's price is offset by a rise in bonds, and vice versa.

floating-rate preferred stock

A special and unusual type of preferred stock with a dividend that is reset at specified intervals according to a predetermined formula. Floating-rate preferred stock contrasts with most preferred stock issues that pay a fixed quarterly dividend. Floating-rate preferred stock issues do not generally fluctuate much in price because the dividend is automatically adjusted to keep the shares selling near to par. Also called adjustable-rate preferred stock, variable-rate preferred stock.
References in periodicals archive ?
5 billion of Non-Cumulative Preferred Stock Series O with a stated value of $50 per share and is a non-convertible floating rate preferred stock with an original coupon of 7.
The other series would be a non-convertible floating rate preferred stock.
5 million after tax charge is for the reduction to fair market value, as of June 30, 2003, of three issues of floating rate preferred stock of FHLMC and FNMA that, as of the same date, had a combined cost of $18.
The charge is for the impairment of floating rate preferred stock of the Federal Home Loan Mortgage Corporation (FHLMC), and the Federal National Mortgage Association (FNMA).