Convertible monthly income preferred stock
Similar to convertible preferred , MIPS are issued by a special-purpose entity, called a special purpose subsidiary (SPS) set up by the parent company.
The dividends paid by the MIPS are tax-
deductible to the corporation - an advantage to
both issuer and investor.
The SPS lends the proceed of the stock to its
corporate parent. The corporate parent can
deduct the interest payments on the debt.