Public Income Notes - PINES

AAA

DEFINITION of 'Public Income Notes - PINES'

An unsecured, unsubordinated debenture issued by a public company. PINES are a type of exchange traded note that trade on a stock exchange but also bear interest. PINES are also a type of preferred security and fall into the same category as quarterly income preferred securities (QUIPS), monthly income preferred securities (MIPS), trust certificates and trust preferred securities. Two examples of companies that issue PINES are GMAC Mortgage and General Electric Capital; the notes trade on the New York Stock Exchange under the ticker symbols GMA and GEA, respectively.

INVESTOPEDIA EXPLAINS 'Public Income Notes - PINES'

Because PINES are unsubordinated (also called senior debt), they have precedence over other loans or securities in the event that the issuing company should default. This means that an investor holding PINES faces less default risk than with subordinated debt (also called junior debt) because holders of unsubordinated debt are at the front of the line to be repaid. However, because PINES are unsecured, they are not backed by any of the firm's assets, which makes them riskier for investors than secured investments. PINES also have advantages to their issuers, including the tax deductibility of interest payments.



RELATED TERMS
  1. Bond

    A debt investment in which an investor loans money to an entity ...
  2. Unsecured Note

    A loan that is not secured by the issuer's assets. Unsecured ...
  3. Trust Certificate

    A bond or debt investment, usually in a public corporation, that ...
  4. Trust Preferred Securities - TruPS

    A security similar to debentures and preferreds that is generally ...
  5. Debenture

    A type of debt instrument that is not secured by physical assets ...
  6. Monthly Income Preferred Securities ...

    Shares that are an interest in a limited partnership existing ...
RELATED FAQS
  1. Where can I find year-to-date (YTD) returns for benchmarks?

    Benchmarks are securities or groups of securities against which investment performance is analyzed. Examples of popular equity ... Read Full Answer >>
  2. What is the effective interest method of amortization?

    The effective interest method is an accounting practice used for discounting a bond. This method is used for bonds sold at ... Read Full Answer >>
  3. Under what circumstances would someone enter into a repurchase agreement?

    In finance, a repurchase agreement represents a contract between two parties, where one party sells a security to the other ... Read Full Answer >>
  4. What type of asset allocation should I use if I am already retired?

    Among investors, asset allocation is a topic of discussion that receives a great deal of weight during the asset accumulation ... Read Full Answer >>
  5. Is a company's paid in capital affected by the trading of its shares in the secondary ...

    The amount of paid-in capital a company has is not affected by the trading of its shares on the secondary market. Paid-in ... Read Full Answer >>
  6. Why is the value of capital stock important to public shareholders?

    The value of a company's capital stock is important to public shareholders, because a company's capital stock represents ... Read Full Answer >>
Related Articles
  1. Investing Basics

    Will Corporate Debt Drag Your Stock Down?

    Borrowed funds can mean a leg up for companies or the boot for investors. Find out how to tell the difference.
  2. Bonds & Fixed Income

    Corporate Bonds: An Introduction To Credit Risk

    Corporate bonds offer higher yields, but it's important to evaluate the extra risk involved before you buy.
  3. Bonds & Fixed Income

    How Bond Market Pricing Works

    Learn the basic rules that govern how bond prices are determined.
  4. Options & Futures

    An Introduction To Corporate Bond ETFs

    Learn about the pros and cons of these specialized ETFs, and get in on the opportunities they can provide.
  5. Bonds & Fixed Income

    Convertible Bonds: Pros And Cons For Companies And Investors

    Find out why businesses choose this type of financing and what effect this has on investors.
  6. Professionals

    Why Investors Are Bailing on Bond ETFs

    Investors are fleeing bond ETFs. Should you follow the herd? Hint: It depends on the type of bond.
  7. Professionals

    Is a Bond Market Selloff Coming?

    A big investment management company is concerned about bond market conditions and allocating more capital to cash. Should you follow?
  8. Credit & Loans

    What is a Syndicated Loan?

    A syndicated loan is one that involves a group of lenders (called the syndicate) who pool their lending resources to make a loan.
  9. Investing Basics

    What is an Asset-Backed Security?

    An asset-backed security (ABS) is a debt security collateralized by a pool of assets.
  10. Options & Futures

    How The New NYSE Binary Options Work

    The New York Stock Exchange has launched its own version of binary options called Binary Return Derivatives Options or ByRDs.

You May Also Like

Hot Definitions
  1. Treasury Yield

    The return on investment, expressed as a percentage, on the debt obligations of the U.S. government. Treasuries are considered ...
  2. Bund

    A bond issued by Germany's federal government, or the German word for "bond." Bunds are the German equivalent of U.S. Treasury ...
  3. European Central Bank - ECB

    The central bank responsible for the monetary system of the European Union (EU) and the euro currency. The bank was formed ...
  4. Quantitative Easing

    An unconventional monetary policy in which a central bank purchases private sector financial assets in order to lower interest ...
  5. Current Account Deficit

    A measurement of a country’s trade in which the value of goods and services it imports exceeds the value of goods and services ...
  6. International Monetary Fund - IMF

    An international organization created for the purpose of: 1. Promoting global monetary and exchange stability. 2. Facilitating ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!