Financial

Monthly income preferred security

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Monthly income preferred security (MIP)

Preferred stock issued by a subsidiary located in a tax haven. The subsidiary relends the money to the parent.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Monthly Income Preferred Securities

Preferred stock representing a portion of ownership in a limited partnership. The limited partnership is a subsidiary of another company and exists only for the purpose of issuing the MIPS. The proceeds from MIPS are lent to the partnership's parent company. These securities thus combine aspects of stocks and bonds; they mature on a monthly basis and usually have a par value of $25. Returns on MIPS come out of the partnership's pretax earnings.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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