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Explanations of Security Acronyms

An acronym is a word formed from the first (or first few) letters of a series of words that is used as an abbreviation to refer to that series of words (i.e. QUIPS for QUarterly Interest Preferred Securities). This page provides basic descriptions of the many of the acronyms used to designate preferred securities, debt securities and special stock purchase products offered by Wall Street. The tables and lists included on our Income Tables and Income Lists menu include acronyms in many of the security descriptions. The numbers in brackets following the security's name designate which of our lists and tables include the securities for each acronym (the key to those numbers is at the bottom of this page). The symbol included with the Example for each acronym has a link to the IPO prospectus of an example security - just click on the symbol to see the IPO Prospectus for that security.

Preferred Securities

This category of preferred securities includes the many specially named products, trademark names and service marks for securities that tend to emulate the basic features of the normal preferred security. The preferred type securities are listed on both our Preferred Stocks list and Preferred Stock table.

Trust Preferred Securities
Trust preferreds represent most of the new preferred offerings coming on to the markets today. The trust preferred is a hybrid security consisting of a preferred stock issued by a special trust and a debt security issued by the company. The special trust is a subsidiary of the company set up solely for the purpose of selling and administrating the trust preferred. The trust sells their preferred securities to investors and then uses the proceeds from the sale of the trust preferred security to buy debt securities (debentures, etc.) from the company setting up the trust. The debt securities are generally junior subordinated deferrable interest debentures, which are the lowest ranked of the debt securities issued by the company, and which generally have a maturity date of 30 to 50 years from the date of issue. The interest payments of the debt securities, paid by the company to the trust, are used to fund the trust's distributions to the preferred security holders. When the debt securities mature and are paid off, the trust in turn uses those funds to pay off the trust preferred securities which mature on the same date as the debt securities. Trust preferreds are subject to redemption at the company's option, generally at the issue or liquidation preference price, and generally in five years from the date of issue. Redemption of the securities, on or after the specified optional redemption date, is optional for the company but, if called, the call for redemption is mandatory for the holder of the securities. The debt securities generally have a deferrable interest clause that allows the company to defer distributions for up to five years at their option and for any reason but not beyond the maturity date. A distribution deferral will generate a very unpleasant situation for the preferred holder as the tax laws require the holder to pay taxes on the deferred but accruing dividends even though the holders is not receiving any cash. The company also provides a guarantee for the trust preferred that guarantees that, if the company pays the interest payment to the trust, the company guarantees that the trust will pay the dividend payments to the security holders. The advantage of this hybrid arrangement to the company is that the interest paid on the debt securities is deductible from their income taxes while normal preferred dividends would not be deductible. Trust preferred securities are listed on our Trust Preferred Stocks table which can be found on the "Income Tables" menu at the top of any page.
Example Trust Preferred Security:    USB-C   (USB Capital IV, 7.35% Trust Preferred Securities)

QUIPS - Quarterly Income Preferred Securities
QUIPS (QUarterly Income Preferred Security) is a security name which is basically a Goldman, Sachs service mark and a marketing tool for a Trust Preferred Security (see above). The QUIPS pay quarterly income distributions as do virtually all trust preferreds. QUIPS are listed on our Trust Preferred Stocks table which can be found on the "Income Tables" menu at the top of any page.
Example QUIPS Security:    SRE-A   (Sempra Energy Capital Trust I, 8.90% QUIPS)

TruPS - Trust Preferred Securities
The TruPS (Trust Preferred Securities) is a security name which is basically a Solomon Smith Barney Inc. marketing tool for a Trust Preferred Security (see above). TruPS are listed on our Trust Preferred Stocks table which can be found on the "Income Tables" menu at the top of any page.
Example TruPS Security:    STI-   (SunTrust Capital IV, 7.125% TruPS)

TOPrS - Trust Originated Preferred Securities
The TOPrS (Trust Originated Preferred Securities) is a security name which is basically a Merrill Lynch marketing tool for a Trust Preferred Security (see above). TOPrS are listed on our Trust Preferred Stocks table which can be found on the "Income Tables" menu at the top of any page.
Example TOPrS Security:    USB-A   (USB Capital II, 7.20% TOPrS)

Exchange-Traded Debt Securities

This category of exchanged-traded debt securities includes the specially named products, trademark names and service marks for debt securities that tend to emulate the basic features of a preferred security but are higher ranked in the credit rating hierarchy than preferred securities. Exchange-Traded Debt Securities are generally senior unsecured debt securities that rank equally with the company's other senior unsecured and unsubordinated debt and senior to the preferred and common securities of the company. Exchange-Traded Debt Securities are the most practical way for an individual investor to gain access higher ranked securities without attempting to deal with the corporate bond market which is mainly geared to institutional investors. The debt securities are listed on the Exchange-Traded Debt Securities table and list and on our Exchange-Traded Fixed Income Securities table and list.

PINES - Public Income Notes
PINES represent general, unsecured, unsubordinated obligations of a company that a sold to the general public in small share amounts such as $25, trade on the stock exchanges, pay fixed specified quarterly interest payments, are redeemable at par plus accrued interest at the option of the company after a specified period (generally 5 years), and mature in 30 to 50 years. The PINES trade flat on the markets (the price does not include accrued interest not included in the trading price). The PINES are generally senior unsecured debt securities that rank equally with the company's other senior unsecured and unsubordinated debt and senior to the preferred securities of the company. PINES are listed on our Exchange-Traded Debt Securities table which can be found on the "Income Tables" menu at the top of any page.
Example PINES Security:    SBT   (SBC Communications Inc., 7.00% PINES)

QUIBS - Quarterly Interest Bonds
The QUIBS (QUarterly Interest Bonds) is a security name which is basically a Morgan Stanley marketing tool for a company bond sold in small denominations (generally $25 per bond) paying quarterly interest to emulate a Trust Preferred Security (see above) but without the trust. The QUIBS are generally senior unsecured debt securities that rank equally with the company's other senior unsecured and unsubordinated debt and senior to the preferred securities of the company. QUIBS are listed on our Exchange-Traded Debt Securities table which can be found on the "Income Tables" menu at the top of any page.
Example QUIBS Security:    HLN   (Hilton Hotels Corp., 8.0% QUIBS)

QUICS - Quarterly Income Capital Securities
QUICS (QUarterly Income Capital Security) are a debt security with a name that is a Lehman Brothers service mark and marketing tool for a company debt security sold in small denominations (generally $25 per bond), paying quarterly interest, redeemable at the issuer's option generally in five years, and maturing in 30 to 40 years to emulate a Trust Preferred Security (see above) but without the trust. The QUICS are generally senior unsecured debt securities that rank equally with the company's other senior unsecured and unsubordinated debt and senior to the preferred securities of the company. QUICS are listed on our Exchange-Traded Debt Securities table which can be found on the "Income Tables" menu at the top of any page.
Example QUICS Security:    NRS   (National Rural Utilities Coop Finance Corp., 7.40% QUICS)

QUIDS - Quarterly Income Debt Securities
QUIDS (QUarterly Income Debt Security) are a debt security with a name that is Goldman, Sachs & Co. service mark and marketing tool for a company debt security sold in small denominations (generally $25), paying quarterly interest, redeemable at the issuers option generally in 5 years, and maturing in 30 to 40 years to emulate a Trust Preferred Security (see above) but without the trust. The QUIDS are generally senior unsecured debt securities that rank equally with the company's other senior unsecured and unsubordinated debt and senior to the preferred securities of the company. QUIDS are listed on our Exchange-Traded Debt Securities table which can be found on the "Income Tables" menu at the top of any page.
Example QUIDS Security:    FSA   (Financial Security Assurance, 6.95% Senior QUIDS)

Mandatory Convertible Securities

The securities in this group are income securities which include a stock purchase contract that requires the holder to purchase a variable number of shares of common stock on or before a specified date. We definitely recommend reading the IPO Prospectus for the security before purchase as these securities have many special provisions that the purchaser needs to understand before purchase. These securities are found on our Mandatory Convertible Securities Table.

Equity Security Units
Equity Security Units initially consist of a:
Contract to Purchase Common Stock at a specified time (i.e. within 3 years) with the amount of stock required to be purchased equal to the purchase price of the unit, and with the number of shares to be received determined by a schedule based on the stock trading price prior to the specified date of purchase (i.e the 20 days prior to the purchase date).
Company Debt Security which pays the security's specified normal quarterly distribution plus an additional contract adjustment distribution payment. The contract adjustment distribution rate is subject to reset and remarketing at or after the specified common stock purchase date. The debt security is pledged as collateral to secure the holder's obligations under the stock purchase contract. Equity Security Units are listed on our Mandatory Convertible Securities table which can be found on the "Income Tables" menu at the top of any page.
Example Equity Security Unit:    NOC-E   (Northrop Grumman Corp., 7.25% Equity Security Units)

FELINE PRIDES (a Merrill Lynch & Co., Inc. Service Mark)
FELINE PRIDES initially consist of a:
Contract to Purchase Common Stock at a specified time (i.e. within 3 years) with the amount of stock required to be purchased equal to the purchase price of the unit, and with the number of shares to be received determined by a schedule based on the stock trading price prior to the specified date of purchase (i.e the 20 days prior to the purchase date).
Company Preferred Security which pays the security's specified normal quarterly distribution plus an additional contract adjustment distribution payment. The preferred is to be redeemed 2 years after the purchase contract date and is subject to a reset rate at the common stock purchase date. FELINE PRIDES are listed on our Mandatory Convertible Securities table which can be found on the "Income Tables" menu at the top of any page.
Example FELINE PRIDES:    CIN-I   (Cinergy Corp., 9.5% FELINE PRIDES)

PEPS - Premium Equity Participating Security Units (a Morgan Stanley & Co. Service Mark)
PEPS - Premium Equity Participating Security Units initially consist of a:
Contract to Purchase Common Stock at a specified time (i.e. within 3 years) with the amount of stock required to be purchased equal to the purchase price of the unit, and with the number of shares to be received determined by a schedule based on the stock trading price prior to the specified date of purchase (i.e the 20 days prior to the purchase date).
Company Preferred Security which pays the security's specified normal quarterly distribution plus an additional contract adjustment distribution payment. The preferred is to be redeemed 6 months after the purchase contract date. PEPS are listed on our Mandatory Convertible Securities table which can be found on the "Income Tables" menu at the top of any page.
Example PEPS Unit:    PRE-P   (PartnerRe Ltd, 8% PEPS Units)

PIERS - Preferred Income Equity Redeemable Shares
PIERS are a preferred stock paying a fixed dividend but also include a warrant, exercisable at any time, at the option of the holder, to purchase common stock in the company at a stated conversion price (generally at a small premium above the price at time of issue). They are also redeemable, at the company's option, after a specified time such as five years, for common stock at a scheduled conversion price with a variety of scheduled provisions and methods for fixing the conversion price. The PIERS can be subject to mandatory redemption at the face value in cash after a fixed period of time, often ten years, if not previously exercised. PIERS are listed on our Mandatory Convertible Securities table which can be found on the "Income Tables" menu at the top of any page.
Example PIERS Unit:    SLG-A   (SL Green Realty Corp., 8.0% PIERS)

PIES - Premium Income Equity Securities
Premium Income Equity Securities (PIES) are a hybrid security that includes both a:
Stock Purchase Contract requiring the holder to purchase a specified amount of common stock at a specified date (generally four years from the date of issue). The amount of stock the contract requires is generally equal to the purchase price of the PIES, generally four years from the date of issue. The amount of stock purchased is based on a predetermined schedule based on the price of the stock immediately prior to the purchase date.
Debt Security which pay quarterly distributions that include a contract adjustment percentage (which terminates at the purchase date) plus the regular distributions from the debt securities. PIES are listed on our Mandatory Convertible Securities table which can be found on the "Income Tables" menu at the top of any page.
Example PIES Security:    SRC   (Sierra Pacific Resources, 9% PIES)

Reset PERQS - Reset Performance Equity-linked Redemption Quarterly-pay Securities
Reset PERQS are a security that is mandatorily exchangeable into a specified common stock on a specified date, generally two years from the date of issue. The security also pays a specified interest on a quarterly basis during the period between the issue date and the exchange date. The exchange rate for conversion into common stock is specified (i.e. one half share per PERQS) and based on the price of the common stock at the date of issue. Potential gains are normally capped. The Reset portion of the name indicates that if the price of the common stock exceeds specified prices at specified dates, the exchange rate is adjusted downwards to an exchange rate of a lower number of shares per PERQS. PERQS are listed on our Mandatory Convertible Securities table which can be found on the "Income Tables" menu at the top of any page.
Example Reset PERQS Security:    REB   (Morgan Stanley Dean Witter, 12% eBay Reset PERQS)

SPARQS - Stock Participation Accreting Redemption Quarterly-pay Securities
The SPARQS (Stock Participation Accreting Redemption Quarterly-pay Securities) is a Morgan Stanley marketing name for a security which will pay quarterly distributions at the specified rate and then pay off the security (generally in two years) in shares of common stock in the specified company at the previously specified conversion rate. After one year, the issuer also has the right to call the security and pay off at a specified maximum gain which includes all quarterly distributions. Morgan Stanley SPARQS are listed on our SIP - Common Stock Ownership list which can be found on the "Stock Lists" menu at the top of any page.
Example SPARQS Security:    MPQ   (Morgan Stanley Dean Witter, 8% Sun Micro SPARQS)

Callable STRIDES - Callable STock Return Income DEbt Securities
Callable STRIDES - Callable STock Return Income DEbt Securities are a Merrill Lynch marketing name for a security which will pay quarterly interest and then pay off the security (generally in two years) in shares of common stock in the specified company at the previously specified conversion rate. After one year, the issuer also has the right to call the security and pay off at a specified maximum gain which includes all quarterly distributions. Merrill Lynch STRIDES are listed on our SIP - Common Stock Ownership list which can be found on the "Stock Lists" menu at the top of any page.
Example Callable STRIDES Security:    EMH   (Merrill Lynch, 8% EMC Corp. Callable STRIDES)

WIRES - Warrants and Income Redeemable Equity Securities
The WIRES (Warrants and Income Redeemable Equity Securities) is a Morgan Stanley marketing name for a security which consists of both a warrant to purchase common stock and a trust preferred security. The warrant allows the holder to purchase common stock at a fixed but increasing exercise price at any time prior to the maturity date. The preferred security is a trust preferred security subject to remarketing at the exercise of the warrants and subject to redemption shortly after that time. WIRES are listed on our SIP - Common Stock Ownership list which can be found on the "Stock Lists" menu at the top of any page.
Example WIRES Security:    NDE-   (IndyMac Capital Trust I, Warrants & 6% Redeem Pfd WIRES)

Third Party Trust Preferreds

Third party trust preferreds (formerly called asset backed securities) are Wall Street Products that are very similar to trust preferred securities with the major exception being that they generally pay semiannual distributions.

Third Party Trust Preferreds Certificates
Third Party Trust Preferreds are Wall Street products which consist of a trust certificate based on a third party's underlying security which can be either a debt security or a preferred security. The security issuer buys the underlying securities on the open market and sets up a special trust whose only function is to issue the third party trust certificates and then administer the collect and payment of funds between the underlying security issuer and the holders of the trust certificates. The trust purchases the underlying securities from the issuer and then repackages them for sale to individual investors in $25 or sometimes $10 denominations. The trust certificates often pay a different rate of distributions then do the underlying securities since the securities may be purchased by the issuer at either a discount or premium to the original price. The underlying securities are often institutional securities originally sold in large denominations which pay semi-annual interest. The trust certificates pay distributions semiannually at rates similar to preferred and trust preferred securities. The trust certificates are normally callable at the option of the call warrant holder normally after 5 years from the date of issue. The trust certificate credit ratings are based on the credit rating of the issuer of the underlying security. The trust certificates trade flat (see our glossary for a definition). Third Party Trust Preferred Certificates are listed on our Third Party Trust Preferreds table which can be found on the "Income Tables" menu at the top of any page.

CBTCs - Corporate Backed Trust Certificates
Corporate Backed Trust Certificates are a Lehman ABS marketing name for a third party trust preferred certificates (see above). Lehman ABS Corp. is an indirect wholly-owned subsidiary of Lehman Brothers Inc. (NYSE: LEH). Lehman ABS Corp Bkd Trust Certs (CBTCs) Certificates are listed on our Third Party Trust Preferreds table which can be found on the "Income Tables" menu at the top of any page.
Example CBTCs Certificates:    JBD   (Lehman ABS Corp Bkd Trust Certs 2003-02, 6.00% BellSouth Capital)

CorTS - Corporate-backed Trust Securities
Corporate-Backed Trust Securities (CorTS) are a Structured Products Corp. (an indirect, wholly-owned subsidiary of Citigroup Global Markets Holdings Inc., formerly Solomon Smith Barney) marketing name for third party trust preferred certificates (see above). Structured Products CorTS are listed on our Third Party Trust Preferreds table which can be found on the "Income Tables" menu at the top of any page.
Example CorTS Securities:    KVU   (Structured Products CorTS II, Ford Motor Co., 8.00% Certificates)

PPLUS (formerly PreferredPlus) - PPLUS Trust Certificates
Merrill Lynch Depositor Inc., PPLUS Trust Certificates are a Merrill Lynch marketing name for third party trust preferred certificates (see above). Merrill Lynch Depositor, Inc., is a indirect, wholly owned, limited purpose subsidiary of Merrill Lynch & Co., Inc. ML Depositor PPLUS (also PreferredPlus) are listed on our Third Party Trust Preferreds table which can be found on the "Income Tables" menu at the top of any page.
Example PPLUS Securities:    PYB   (Merrill Lynch Depositor PPLUS Trust 5.75% Goldman Sachs Certificates GSG-2).

SATURNS - Structured Asset Trust Unit Repackagings
MS Structured Products Corp., Structured Asset Trust Unit Repackagings are a Morgan Stanley marketing name for third party trust preferred certificates (see above). MS Structured Products Corp., is a indirect, wholly owned, limited purpose subsidiary of Morgan Stanley. MS Structured Asset SATURNS are listed on our Third Party Trust Preferreds table which can be found on the "Income Tables" menu at the top of any page.
Example SATURNS Units:    DKZ   (MS Structured Asset SATURNS 2003-14, 6.875% AT&T Corp.).

TRUCs - Trust Certificates
Bear Stearns Depositor TRUCS are a Bear Stearns marketing name for third party trust preferred certificates (see above). Bear Stearns Depositor Inc., an indirect wholly-owned subsidiary of The Bear Stearns Companies Inc. Bear Stearns Depositor TRUCS Certificates are listed on our Third Party Trust Preferreds table which can be found on the "Income Tables" menu at the top of any page.
Example TRUCs Certificates:    TZI   (Bear Stearns Depositor, 7.00% BellSouth TRUCs 2002-4 Certificates)

Index Based Securities

MITTS - Market Index Target-Term Securities
Market Index Target-Term Securities (MITTS) are a Merrill Lynch marketing name for a security whose returns are based on a stock market average. MITTS make no distributions during the term of the security. At maturity (generally in 5 years or so) the security returns the entire principal amount of the security. The MITTS will also pay an additional amount based on the increase (if any) in the market average on which the security is based, reduced by an annual adjustment factor of 2 or 3%. Merrill Lynch MITTS are listed on our SIP - Based on Indexes list which can be found on the "Stock Lists" menu at the top of any page.
Example MITTS Securities:    MTDW   (Merrill Lynch MITTS Dow Jones Industrial Average due 9/29/2008)

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