Tired of IDSs? Meet the Replacement

Tunick, Britt Erica
November 2004
Investment Dealers' Digest;11/1/2004, Vol. 70 Issue 42, p7
Trade Publication
The article presents information on the use of IDS structure in business enterprises. Iowa Telecommunications Services Inc. is abandoning plans to use the complicated IDS structure in favor of traditional IPOs that include dividend features. A blend of Canadian income funds and master limited partnerships, IDSs are high-yielding, fixed income--like instruments that trade on exchanges like stocks, but also pay shoreholders monthly dividends in the range of 10% to 15% on an annualized basis. Basically, the structure offers a route into the IPO market for issuers that would otherwise find that path blocked. Such issuers are often companies that are unappealing IPO candidates but that generate consistent cash-flows and have no obvious use for the additional cash.


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