INTRODUCTION

Monthly Income Preferred Stock (MIPS), Quarterly Income Preferred Stock (QUIPS), and Trust Originated Preferred Stock (TOPrS) all carry the title of preferred stock. As in the case of other forms of preferred stock, if the issuer fails to make a promised periodic payment, investors cannot force the issuer into bankruptcy. Unlike conventional preferred stock, however, when the promised periodic payments are made, these new securities are deductible by the issuer for tax purposes. In short, MIPS, QUIPS and TOPrS appear to have the tax advantages of debt without the potential for bankruptcy with its attendant costs.

Sounds like a good idea for corporate issuers. And between October of 1993—when Texaco, Inc. issued the first of this kind of security—and the end of 1997, at least 285 other corporate issuers came to that conclusion. In the aggregate, these issuers have raised in excess of $27 billion with the issuance of this novel hybrid security.

But the novelty of MIPS, QUIPS and TOPrS may be more apparent than real. That is not to say that the issuers of MIPS, QUIPS, and TOPrS have been duped in any way. As we will describe in more detail later, MIPS, QUIPS, and TOPrS do present the promise of the tax advantages of debt coupled with the financial flexibility of preferred stock. But there is another security—namely, “income bonds”—that has offered these same advantages for at least the past 100 years. With an income bond, the issuer is obligated to pay interest if, but only if, the company's before-tax earnings exceed the interest payments that are due. And, if the interest payments are made, they are fully deductible for tax purposes. If the interest is not earned and, therefore, not paid, investors cannot force the issuer into bankruptcy.

As described in an article called “The Income Bond Puzzle,” which appeared in a predecessor to this journal, income bonds were issued in the U. S. as early as 1873 and continued to be issued during the late 1800s in the course of various railroad reorganizations.1 Income bonds saw another brief flurry of activity during the 1930s, but have been essentially dormant for the past 60 years. The puzzle in the income bond puzzle is that a security that appears to combine the virtues of debt and preferred stock, and appears to dominate both, was nearly totally ignored by the corporate sector for 60 years. The recent volcanic eruption of MIPS, QUIPS, and TOPrS adds a further twist to the puzzle. These securities appear to offer nothing new. Why are they so popular while income bonds are ignored? The puzzle surrounding the dormancy of income bonds and the popularity of MIPS, QUIPS and TOPrS is actually a smaller part of a larger question: What are the forces that fuel evolution in the design of financial instruments?

In this article, we do not fully answer either of these questions. Our ambitions are more modest.2 We describe MIPS, QUIPS, and TOPrS in greater detail and review their features in the context of capital structure theory. We also provide data on the number and dollar amounts of MIPS, QUIPS, and TOPrS issued by quarter and by industrial sector. Finally, we examine the stock price reaction of the issuer to the company's announcement of its intention to issue this novel security. In addressing these smaller questions, we attempt to shed light on the larger issues surrounding the process of financial innovation.

中文翻译：

---

MIPS、QUIPS 和 TOPrS：新瓶装旧酒

介绍

月收入优先股（MIPS）、季度收入优先股（QUIPS）和信托来源优先股（TOPrS）都带有优先股的称号。与其他形式的优先股一样，如果发行人未能承诺定期付款，投资者不能迫使发行人破产。然而，与传统优先股不同的是，当承诺定期付款时，这些新证券可由发行人出于税收目的扣除。简而言之，MIPS、QUIPS 和 TOPrS 似乎具有债务的税收优势，而没有因随之而来的成本而破产的可能性。

对于公司发行人来说，这听起来是个好主意。从 1993 年 10 月——Texaco, Inc. 首次发行此类证券——到 1997 年底，至少有 285 家其他公司发行人得出了这一结论。总的来说，这些发行人通过发行这种新型混合证券筹集了超过 270 亿美元的资金。

但是 MIPS、QUIPS 和 TOPrS 的新颖性可能比实际更明显。这并不是说 MIPS、QUIPS 和 TOPrS 的发行人以任何方式受骗。正如我们稍后将更详细地描述的那样，MIPS、QUIPS 和 TOPrS 确实提供了债务的税收优势以及优先股的财务灵活性的承诺。但还有另一种证券——即“收入债券”——至少在过去 100 年中提供了这些相同的优势。对于收入债券，发行人有义务支付利息，前提是公司的税前收益超过到期支付的利息。而且，如果支付了利息，它们可以完全抵扣税款。如果没有赚取利息，因此也没有支付利息，投资者就不能迫使发行人破产。

正如本刊前身中一篇名为“收入债券之谜”的文章所述，收入债券早在 1873 年就在美国发行，并在 1800 年代后期的各种铁路重组过程中继续发行。 1 收入债券在 1930 年代经历了另一波短暂的活跃，但在过去 60 年里基本上处于休眠状态。收益债券中的谜团在于，一种似乎结合了债务和优先股的优点，并且似乎主宰两者的证券，在 60 年的时间里几乎被公司部门完全忽视了。最近 MIPS、QUIPS 和 TOPrS 的火山爆发进一步扭曲了这个谜题。这些证券似乎没有提供任何新东西。为什么它们如此受欢迎，而收入债券却被忽视了？围绕收入债券休眠和 MIPS、QUIPS 和 TOPrS 流行的谜团实际上是一个更大问题的一小部分：推动金融工具设计演变的力量是什么？

在本文中，我们没有完全回答这两个问题中的任何一个。我们的野心更为温和。2 我们更详细地描述了 MIPS、QUIPS 和 TOPrS，并在资本结构理论的背景下回顾了它们的特征。我们还提供按季度和按工业部门发布的 MIPS、QUIPS 和 TOPrS 的数量和金额数据。最后，我们研究了发行人对公司宣布打算发行这种新型证券的股价反应。在解决这些较小的问题时，我们试图阐明围绕金融创新过程的较大问题。