A preferred stock that is issued by one firm and backed as to dividends by one or more other firms. This stock has a higher standing than a standard preferred stock as its dividends are guaranteed by a lease issued to another firm and would be paid whether the issuer is generating income or not. In the event of default, guaranteed stockholders are secondary to bondholders but precede common stockholders.
Similar to guaranteed bonds, these stocks are typically used by joint ventures. Historically, railroad companies were the primary issuers of guaranteed stocks (larger lines used to lease track rights from smaller lines).
