Auction Preferred Stock


Also found in: Dictionary, Medical, Encyclopedia.

Auction Preferred Stock

A preferred stock with an adjustable dividend that changes every seven weeks according to the results of a Dutch auction. Every preferred stock has a guaranteed dividend; an auction market preferred stock is distinguished by the fact that the amount of its dividends changes from time to time. An auction market preferred stock is beneficial for some investors because the auction reveals the current market yield every seven weeks, which helps in investment decisions on whether to buy, sell, or hold. It is also called an auction rate preferred stock or a Dutch auction preferred stock.
References in periodicals archive ?
The following describes risks associated with leveraging each Fund through the use of borrowing, which do not materially differ from the risks each Fund currently faces through leveraging using auction preferred stock, except as mentioned immediately above.
Based on the preliminary information available at the Annual Meeting, each of the individuals nominated by the Board of Directors ("Board") for election by holders of both the outstanding common stock and auction preferred stock ("APS"), namely Richard Q.
The terms of each Fund's Articles Supplementary Creating and Fixing the Rights of the Auction Preferred Stock required each Fund to delay the payment of its September common stock dividend because certain asset coverage requirements were not met.
The Board of Directors of Flaherty & Crumrine Preferred Income Opportunity Fund Incorporated (NYSE:PFO) has announced that the Fund will redeem approximately 14% of its outstanding auction preferred stock ("APS") at a redemption price equal to the liquidation preference of $100,000 per share, plus the amount of accumulated but unpaid dividends, for consideration of approximately $10 million.
Under the terms of the Funds' Articles Supplementary Creating and Fixing the Rights of the Auction Preferred Stock, certain asset coverage requirements must be met before dividends can be declared or paid to common stock shareholders.
NYSE: PIF) (the "Fund") announced that an insufficient number of holders of the Fund's common and auction preferred stock were present, in person or by proxy, at its 2008 Annual Meeting of Shareholders (the "Annual Meeting") to constitute a quorum for the conduct of business at the meeting.