Monthly Income Preferred Securities

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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.

Monthly Income Preferred Securities (MIPS)

A type of preferred stock issued by a special-purpose partnership with the intent of lending the proceeds of the stock issue to a corporate parent. Interest received by the partnership is used to pay dividends to the preferred stockholders. The relatively complicated structure of such a stock issue provides a tax deduction to the corporate parent, which pays interest rather than dividends. MIPS offer higher yields than regular preferred stock and can generally be redeemed in five years.
References in periodicals archive ?
0 million shares of its 6% Convertible Monthly Income Preferred Securities ("Convertible MIPS") were converted into 6.
today announced that American General Delaware has elected to exercise its right to cause the conversion rights of the holders of its 6% Convertible Monthly Income Preferred Securities (the "Convertible MIPS") to expire, effective as of the close of business on June 30, 2000.
acting through its General Partner, GTE Corporation, announced it has notified the record holder of its 8-3/4% Cumulative Monthly Income Preferred Securities, Series B (Cusip 36232E301) that it will redeem the issue on March 6, 2000 at $25.
Transamerica Delaware") announced that all of its outstanding 9-1/8% Cumulative Monthly Income Preferred Securities, Series A (the "Series A Preferred Securities"), have been called for redemption on October 25, 1999 at $25 per Series A Preferred Security plus accrued and unpaid dividends.

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