A Primer on Preferred Securities by Columbia Management As financial institutions raise capital and reduce risk, preferred securities can offer an attractive risk-adjusted yield in a low-yield environment. Let’s examine this asset class, including the structures, the motivation of issuers and investors and why we think preferred securities make sense in the current market environment. What is a preferred security? Preferred securities carry attributes of both debt and equity securities. Preferred securities rank higher in the capital structure relative to common equity, as they have a priority claim on dividend payments and a higher claim on assets in a bankruptcy….
A Primer on Preferred Securities
Columbia Threadneedle Investments is a leading global asset management group that provides a broad range of actively managed investment strategies and solutions for individual, institutional and corporate clients around the world. With more than 2000 people including over 450 investment professionals based in North America, Europe and Asia, we manage $506 billion of assets across developed and emerging market equities, fixed income, asset allocation solutions and alternatives.