Floating-rate securities, securities with puts, securities where, if certain things happened, a sinking fund kicked in.
That further reduces the average credit quality of remaining borrowers underlying floating rate securities.
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The remainder of the investment charge was related to holdings the company had in auction-rate securities.
In the past few years there have been the supbrime-mortgage securities blowup and the auction-rate securities blowup.
Auction rate securities are a form of bond issued by a variety of sources, including municipalities and student lenders.
Meanwhile, the market for auction-rate securities is a shadow of what it was.
To see the system at work, look at auction-rate securities, a sort of long-term debt invented in the 1980s.
This means you can, in effect, get inflation protection for free because these adjustable rate securities adjust for inflation.
Finding adjustable rate securities that provide meaningful protection against inflation is a challenge.
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Auction rate securities (ARS) are a bit of financial engineering that dates to 1984, but they are not cash.
The complaint alleges that UBS financial advisers sold auction rate securities to clients without making them aware of the risks.
If the market for auction-rate securities had been a bank, you would have said that it had suffered a run.
From tax shelters, to auction rate securities issues and super-rogue traders UBS is no stranger to ugly press and massive fines.
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Would brokers and banks have been pushing auction rate securities as entirely safe investments if the bureau had been around three years ago?
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After over-exposing themselves to structured-investment vehicles and auction-rate securities, treasurers want to be able to blame someone else if things go wrong again.
The sales were made even as the market for auction rate securities froze up, rendering the holdings impossible to sell without a loss.
Corporations became heavy sellers of auction rate securities last year even before the credit crisis, because of accounting rule changes that made them less advantageous.
Prior to that there was its run-in with U.S. federal agents in a tax evasion scheme, its subprime mortgage writedowns and auction rate securities litigation.
The Swiss bank is working to repair its reputation which has been hurt by trading scandals, tax evasion schemes, subprime mortgage writedowns and auction rate securities litigation.
This is a nexus of private-equity and hedge funds, money-market funds and auction-rate securities, non-banks such as GE Capital and new securities such as CDOs and credit-default swaps.
Even those who try to protect themselves against inflation by buying TIPS and other adjustable rate securities find their refuge is limited by the fact that government decides how much inflation to report.
In a summary of TARP efforts on Thursday, Geithner pointed out that prime fixed-rate securities, the sort once envisioned as purchases for the program, have increased in value by 40% as liquidity has come back to markets.
All needed their funds to be as liquid as cash, the complaint says, and all found out just how unliquid their funds were after they tried to sell the auction rate securities they had been told were as good as cash and couldn't.
Since February 2007, 69 securities class action lawsuits have been filed related to the subprime meltdown, including 11 brought by investors in auction-rate securities, two by investors in bond funds that had losses, and two against investment banks for their hand in creating the structured product market.
And, according to fraud charges filed Thursday by the Massachusetts securities regulator, the managing director of the UBS (nyse: UBS - news - people ) group responsible for auction rate securities in the U.S. began liquidating his own holdings just as that sales effort got off the ground.
Several other banks are the targets of a multistate probe into how auction rate securities were presented and sold to investors, including Citigroup (nyse: C - news - people ), Merrill Lynch (nyse: MER - news - people ) and Morgan Stanley (nyse: MS - news - people ).
In addition, many money market funds and corporate treasuries held Auction Rate Preferred Securities (ARPS).
The move up in yields will be substantial enough over the next few years that all interest-rate sensitive securities will be affected (utilities, preferred stock, etc).
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