UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number 811-21129
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FLAHERTY & CRUMRINE/CLAYMORE PREFERRED SECURITIES INCOME FUND INCORPORATED
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(Exact name of registrant as specified in charter)
301 E. Colorado Boulevard, Suite 720
PASADENA, CA 91101
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(Address of principal executive offices) (Zip code)
Donald F. Crumrine
Flaherty & Crumrine Incorporated
301 E. Colorado Boulevard, Suite 720
PASADENA, CA 91101
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(Name and address of agent for service)
Registrant's telephone number, including area code: 626-795-7300
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Date of fiscal year end: NOVEMBER 30, 2006
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Date of reporting period: FEBRUARY 28, 2006
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Form N-Q is to be used by management investment companies, other than small
business investment companies registered on Form N-5 (ss.ss. 239.24 and 274.5 of
this chapter), to file reports with the Commission, not later than 60 days after
the close of the first and third fiscal quarters, pursuant to rule 30b1-5 under
the Investment Company Act of 1940 (17 CFR 270.30b1-5). The Commission may use
the information provided on Form N-Q in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-Q, and
the Commission will make this information public. A registrant is not required
to respond to the collection of information contained in Form N-Q unless the
Form displays a currently valid Office of Management and Budget ("OMB") control
number. Please direct comments concerning the accuracy of the information
collection burden estimate and any suggestions for reducing the burden to the
Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC
20549. The OMB has reviewed this collection of information under the clearance
requirements of 44 U.S.C. ss. 3507.
ITEM 1. SCHEDULE OF INVESTMENTS.
The Schedule(s) of Investments is attached herewith.
FLAHERTY & CRUMRINE/CLAYMORE PREFERRED SECURITIES INCOME FUND
To the Shareholders of the Flaherty & Crumrine/Claymore Preferred Securities
Income Fund ("FFC"):
The first fiscal quarter of 2006 was a mixed bag for FFC. On the plus
side, for the three-month period ended February 28, 2006, the Fund produced a
total return on net asset value of +2.9%. Despite this strong investment
performance, the net income available to shareholders has declined, and the Fund
reduced the monthly dividend by 8.9% (from $0.14/share to $0.1275/share)
beginning with the March distribution. The focus of the Fund is income, so the
decision to reduce the dividend was difficult, but necessary.
The total return calculation mentioned above has two basic components--net
income earned and net change in principal value. Recently, the latter has done
well while the former has come under some pressure.
Net income earned, the amount of investment income left over after
payments on the Fund's Auction Market Preferred Stock ("AMPS") and other
expenses, is what the Fund can pay out in monthly distributions to common
shareholders. Although investment income has increased recently, payments to
AMPS shares have risen at a faster pace. As a result, the Fund could not
continue to distribute common dividends at the same rate.
The AMPS rate is closely correlated to other short-term interest rates,
all of which have moved up in concert with the Federal Reserve's efforts to
influence the pace of economic activity. Two years ago, the Fund was paying
roughly 1% to "borrow" money via its AMPS shares; these rates are now closer to
4.7%. Despite this jump in rates, the use of leverage continues to add
incremental income for common shares because the money we obtain from leverage
is being invested in securities with much higher yields.
The other component of total return, principal change, normally is not
distributed to common shareholders, but instead is reflected by changes in the
Fund's net asset value. During the fiscal period, the Fund's NAV rose 1.0%.
One last comment on total return--whatever the breakdown between net
income and principal change, the entire amount belongs to common shareholders.
In addition, the two tend to "merge" over time. For example, if principal value
increases and the Fund can realize gains, the Fund will have more money to
invest and can generate additional income. Or, shareholders can use the income
they receive to purchase additional shares via the Dividend Reinvestment Plan to
increase the value of their investment.
As readers may recall from previous discussions of market conditions, the
preferred securities market has two main segments--issues that pay interest and
those that pay dividends. We refer to the first type as "hybrid" preferred
securities and the second as "traditional" preferred stock.
Demand for hybrid preferred securities has been strong for some time; the
supply of new issues, however, has been plentiful. During the period there were
thirty new issues with a market value of $13.2 BILLION. As expected, many of
these new issues were structured like the "ECAP" issues we discussed in our last
letter (and on the Fund's website). Even with this sizable amount of new supply,
the performance of this segment kept pace with most other types of fixed-income
securities during the quarter.
Many of the recent hybrid preferred securities have terms and features
that require very close scrutiny. While the basic structure of the enhanced
capital security is now fairly well established, with each new issue we are
observing small but important differences. This evolutionary process is typical
of new structures--our job is to dissect each issue until we fully understand
every twist and turn.
Investor demand for traditional preferred stock has also been consistently
strong for some time now; however new issue supply has not kept up--during the
fiscal quarter there were only two new issues totaling a meager $300 million. As
a result of this imbalance, this segment has slowly and steadily outperformed
other types of fixed-income securities. The traditional preferred component of
FFC is relatively small, but it made a meaningful contribution to overall
investment performance.
The Fund's hedge positions are intended to provide shareholders with some
protection against significant increases in long-term interest rates. Over the
course of the fiscal quarter, long-term interest rates barely moved, so the
hedging strategy had little impact on the Fund's performance. The Fund's hedging
strategy did benefit from the "flat" U.S. Treasury yield curve, since the cost
of our hedges tends to be lower in this environment.
We hope investors will take advantage of the Fund's website,
WWW.FCCLAYMORE.COM. It contains a wide range of useful and up-to-date
information about the Fund. In addition, some of the topics mentioned above are
analyzed in greater depth in the Frequently Asked Questions section of the
website.
Sincerely,
/s/ Donald F. Crumrine /s/ Robert M. Ettinger
Donald F. Crumrine Robert M. Ettinger
Chairman of the Board President
April 17, 2006
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Flaherty & Crumrine/Claymore Preferred Securities Income Fund Incorporated
PORTFOLIO OVERVIEW
FEBRUARY 28, 2006 (UNAUDITED)
-----------------------------
FUND STATISTICS ON 02/28/06
--------------------------------------------------------------------------------
Net Asset Value $ 22.87
Market Price $ 21.30
Discount 6.86%
Yield on Market Price 7.89%
Common Shares Outstanding 42,601,719
MOODY'S RATINGS % OF PORTFOLIO
--------------------------------------------------------------------------------
AAA 0.9%
AA 4.1%
A 32.0%
BBB 47.7%
BB 10.4%
B 0.1%
Not Rated 4.4%
--------------------------------------------------------------------------------
Below Investment Grade* 9.7%
* BELOW INVESTMENT GRADE BY BOTH MOODY'S AND S&P.
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
INDUSTRY CATEGORIES % OF PORTFOLIO
--------------------------------------------------------------------------------
Banks 35%
Utilities 25%
Insurance 16%
Financial Services 12%
REITs 6%
Oil and Gas 3%
Other 3%
TOP 10 HOLDINGS BY ISSUER % OF PORTFOLIO
--------------------------------------------------------------------------------
Wachovia Corp 3.8%
J.P. Morgan Chase 3.3%
Bank of America 3.1%
Ace Ltd. 3.0%
North Fork Bancorporation 2.9%
HSBC 2.9%
Morgan Stanley 2.5%
Countrywide Financial 2.5%
Washington Mutual 2.3%
Public Service Enterprise Group 2.3%
% OF PORTFOLIO**
---------------------------------------------------------------------------------------------------------------
Holdings Generating Qualified Dividend Income (QDI) for Individuals 24%
Holdings Generating Income Eligible for the Corporate Dividend Received Deduction (DRD) 15%
---------------------------------------------------------------------------------------------------------------
** THIS DOES NOT REFLECT YEAR-END RESULTS OR ACTUAL TAX CATEGORIZATION OF
FUND DISTRIBUTIONS. THESE PERCENTAGES CAN, AND DO, CHANGE, PERHAPS
SIGNIFICANTLY, DEPENDING ON MARKET CONDITIONS. INVESTORS SHOULD CONSULT
THEIR TAX ADVISOR REGARDING THEIR PERSONAL SITUATION.
3
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Flaherty & Crumrine/Claymore Preferred Securities Income Fund Incorporated
PORTFOLIO OF INVESTMENTS
FEBRUARY 28, 2006 (UNAUDITED)
--------------------------------------------------------------------------
SHARES/$ PAR VALUE
-------------- -------
PREFERRED SECURITIES -- 82.8%
BANKING -- 34.7%
---------------------------------------------------------------------------------------------------------------------------
$ 19,000,000 Astoria Capital Trust I, 9.75% 11/01/29 Capital Security, Series B ............. $ 22,295,930
40,000 BAC Capital Trust I, 7.00% Pfd. 12/15/31 ....................................... 1,024,800
6,750 BAC Capital Trust III, 7.00% Pfd. .............................................. 172,699
738,400 BAC Capital Trust IV, 5.875% Pfd. .............................................. 18,105,568
600 BAC Capital Trust V, 7.00% Pfd. ................................................ 15,288
$ 1,240,000 BankBoston Capital Trust I, 8.25% 12/15/26 Capital Security .................... 1,317,153
$ 16,155,000 BankBoston Capital Trust II, 7.75% 12/15/26 Capital Security, Series B ......... 17,065,173
1,800 Bank of New York Capital IV, 6.875% Pfd., Series E ............................. 45,414
51,000 Bank One Capital Trust VI, 7.20% Pfd. .......................................... 1,302,030
$ 6,500,000 Barclays Bank PLC, Adj. Rate Pfd. .............................................. 6,557,525**(1)
105,000 Cobank, ACB, 7.00% Pfd., 144A**** .............................................. 5,447,925*
27,900 Comerica (Imperial) Capital Trust I, 7.60% Pfd. ................................ 712,705
$ 800,000 CoreStates Capital Trust I, 8.00% 12/15/26 Capital Security, 144A**** .......... 847,248
$ 11,000,000 Cullen/Frost Capital Trust I, 8.42% 02/01/27 Capital Security, Series A ........ 11,748,880
$ 2,500,000 Dime Capital Trust I, 9.33% 05/06/27 Capital Security, Series A ................ 2,704,062
12,300 FBOP Corporation, Adj. Rate Pfd., 144A**** ..................................... 12,392,250*
$ 5,600,000 First Chicago NBD Capital A, 7.95% 12/01/26 Capital Security, 144A**** ......... 5,916,400
$ 875,000 First Chicago NBD Capital B, 7.75% 12/01/26 Capital Security, 144A**** ......... 923,287
$ 3,000,000 First Midwest Capital Trust I, 6.95% 12/01/33 Capital Security ................. 3,278,565
400,000 First Republic Bank, 6.25% Pfd. ................................................ 9,888,000*
$ 3,000,000 Fleet Capital Trust II, 7.92% 12/11/26 Capital Security ........................ 3,173,310
62,600 Fleet Capital Trust VII, 7.20% Pfd. ............................................ 1,604,438
86,500 Fleet Capital Trust VIII, 7.20% Pfd. ........................................... 2,231,700
3 FT Real Estate Securities Company, 9.50% Pfd., 144A**** ........................ 4,327,519
$ 37,550,000 GreenPoint Capital Trust I, 9.10% 06/01/27 Capital Security .................... 40,792,255
$ 30,725,000 HBOS Capital Funding LP, 6.85% Pfd. ............................................ 31,021,343(1)
6,300 Household Capital Trust VI, 8.25% Pfd. ......................................... 158,854
7,500 HSBC Series II, Variable Inverse Pfd., Pvt. .................................... 8,175,000*
45,000 HSBC Holdings PLC, 6.20% Pfd., Series A ........................................ 1,119,600**(1)
$ 14,357,000 J.P. Morgan Capital Trust I, 7.54% 01/15/27 Capital Security ................... 15,149,147
$ 11,271,000 J.P. Morgan Capital Trust II, 7.95% 02/01/27 Capital Security .................. 11,966,815
175,450 J.P. Morgan Chase Capital XI, 5.875% Pfd., 06/15/33 ............................ 4,247,645
147,800 J.P. Morgan Chase Capital XIV, 6.20% Pfd., 10/15/34 ............................ 3,714,214
255,000 J.P. Morgan Chase Capital XVI, 6.35% Pfd., 06/01/35 ............................ 6,451,500
23,800 Keycorp Capital V, 5.875% Pfd., Series A ....................................... 580,244
$ 14,295,000 Keycorp Institutional Capital A, 7.826% 12/01/26 Capital Security, Series A .... 15,088,515
$ 4,000,000 Lloyds TSB Bank PLC, 6.90% Pfd. ................................................ 4,038,320(1)
$ 25,280,000 Marshall & Ilsley Capital Trust A, 7.65% 12/01/26 Capital Security ............. 26,587,482
20 Marshall & Ilsley Investment II, 8.875% Pfd., 144A**** ......................... 2,111,267
4
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Flaherty & Crumrine/Claymore Preferred Securities Income Fund Incorporated
PORTFOLIO OF INVESTMENTS (CONTINUED)
FEBRUARY 28, 2006 (UNAUDITED)
--------------------------------------------------------------------------
SHARES/$ PAR VALUE
-------------- -------
PREFERRED SECURITIES -- (CONTINUED)
BANKING -- (CONTINUED)
---------------------------------------------------------------------------------------------------------------------------
$ 2,000,000 NB Capital Trust IV, 8.25% Capital Security .................................... $ 2,136,290
$ 3,000,000 North Fork Capital Trust I, 8.70% 12/15/26 Capital Security .................... 3,197,535
265,000 PFGI Capital Corporation, 7.75% Pfd. ........................................... 7,043,700
$ 13,750,000 RBS Capital Trust B, 6.80% Pfd. ................................................ 13,901,525**(1)
$ 15,600,000 Republic New York Capital I, 7.75% 11/15/26 Capital Security ................... 16,408,314(1)
$ 17,127,000 Republic New York Capital II, 7.53% 12/04/26 Capital Security .................. 18,031,220(1)
Roslyn Real Estate:
40 8.95% Pfd., Series C, 144A**** ............................................... 4,450,740
135 Adj. Rate Pfd., Series D, 144A**** ........................................... 13,803,750
Royal Bank of Scotland Group PLC:
558,000 5.75% Pfd., Series L ......................................................... 13,453,380**(1)
129,500 6.35% Pfd., Series N ......................................................... 3,295,775**(1)
110,000 6.40% Pfd., Series M ......................................................... 2,813,800**(1)
$ 14,167,000 Union Planters Capital Trust, 8.20% 12/15/26 Capital Security .................. 14,998,320
60 Union Planters Preferred Funding, 7.75% Pfd., Series 144A**** .................. 6,987,458
89,200 USB Capital VIII, 6.35% Pfd., 12/29/65 ......................................... 2,259,436
23,500 VNB Capital Trust I, 7.75% Pfd. ................................................ 595,608
2,017,200 Wachovia Preferred Funding, 7.25% Pfd., Series A ............................... 56,310,138
$ 20,750,000 Washington Mutual, Inc., 8.36% 12/01/26 Capital Security, 144A**** ............. 22,017,825
$ 10,500,000 Washington Mutual Preferred Funding, Variable Rate Pfd. 03/29/49, 144A**** ..... 10,378,410
$ 8,000,000 Webster Capital Trust II, 10.00% 04/01/27 Capital Security ..................... 8,716,000
-------------------------------------------------------------------------------------------------------------------
525,099,294
--------------
FINANCIAL SERVICES -- 9.7%
---------------------------------------------------------------------------------------------------------------------------
315,000 CIT Group, Inc., 6.35% Pfd., Series A .......................................... 8,270,325*
30,000 Corporate-Backed Trust Certificates, 7.75% Pfd., Series CIT .................... 785,700
$ 15,459,000 Countrywide Capital I, 8.00% 12/15/26 Capital Security ......................... 15,794,692
860,100 Countrywide Capital IV, 6.75% Pfd. ............................................. 21,773,431
41,500 Fannie Mae, 5.125% Pfd. ........................................................ 1,936,598*
$ 7,000,000 Gulf Stream-Compass 2005 Composite Notes, 144A**** ............................. 6,989,500
Lehman Brothers Holdings, Inc.:
181,400 5.67% Pfd., Series D ......................................................... 9,212,399*
85,000 5.94% Pfd., Series C ......................................................... 4,362,200*
481,850 6.50% Pfd., Series F ......................................................... 12,520,872*
35,000 Lehman Capital Trust III, 6.375% Pfd., Series K ................................ 891,800
5,000 Lehman Capital Trust V, 6.00% Pfd., Series M ................................... 123,200(3)
31,400 Lehman Capital Trust VI, 6.24% Pfd., Series N .................................. 785,000
138,975 Merrill Lynch Capital Trust V, 7.28% Pfd. ...................................... 3,669,635
4,000 Merrill Lynch Series II STRIPES Custodial Receipts, Pvt. ....................... 4,160,000*
5
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Flaherty & Crumrine/Claymore Preferred Securities Income Fund Incorporated
PORTFOLIO OF INVESTMENTS (CONTINUED)
FEBRUARY 28, 2006 (UNAUDITED)
--------------------------------------------------------------------------
SHARES/$ PAR VALUE
-------------- -------
PREFERRED SECURITIES -- (CONTINUED)
FINANCIAL SERVICES -- (CONTINUED)
---------------------------------------------------------------------------------------------------------------------------
10,000 Merrill Lynch Preferred Capital Trust IV, 7.12% Pfd. ........................... $ 260,650
64,300 Morgan Stanley Capital Trust II, 7.25% Pfd. .................................... 1,629,684
849,098 Morgan Stanley Capital Trust III, 6.25% Pfd. ................................... 21,049,139
202,000 Morgan Stanley Capital Trust IV, 6.25% Pfd. .................................... 5,052,020
9,000 Morgan Stanley Capital Trust V, 5.75% Pfd. ..................................... 212,490
329,700 Morgan Stanley Capital Trust VI, 6.60% Pfd. .................................... 8,354,598
$ 10,000,000 RACERS(R) Series 2005 AMMC V Trust, 144A**** ................................... 10,309,069
160,000 SLM Corporation, 6.97% Pfd., Series A .......................................... 8,912,000*
-------------------------------------------------------------------------------------------------------------------
147,055,002
--------------
INSURANCE -- 15.1%
---------------------------------------------------------------------------------------------------------------------------
1,719,980 ACE Ltd., 7.80% Pfd., Series C ................................................. 44,960,277**(1)
Aegon NV:
420,900 6.375% Pfd. .................................................................. 10,665,606**(1)(2)
60,000 6.50% Pfd. ................................................................... 1,514,400**(1)
$ 16,051,000 AON Capital Trust A, 8.205% 01/01/27 Capital Security .......................... 19,187,847
83,800 Arch Capital Group Ltd., 8.00% Pfd. ............................................ 2,131,453**(1)
Axis Capital Holdings:
156,800 7.25% Pfd., Series A ......................................................... 3,947,440**(1)
77,655 Variable Rate Pfd., Series B ................................................. 8,004,289(1)
288,200 Berkley W.R. Capital Trust II, 6.75% 07/26/45 .................................. 7,192,031
48,100 Corporate-Backed Trust Certificates, 8.00% Pfd., Series AON .................... 1,221,740
106,000 Corts-AON Capital, 8.205% Pfd. ................................................. 2,860,410
37,000 Corts-UnumProvident Corporation, 8.50% Pfd. .................................... 1,000,110
62,200 Endurance Specialty Holdings, 7.75% Pfd. ....................................... 1,560,598**(1)
154,300 Everest Re Capital Trust II, 6.20% Pfd., Series B .............................. 3,612,935(1)
ING Groep NV:
36,000 7.05% Pfd. ................................................................... 923,940**(1)
394,600 7.20% Pfd. ................................................................... 10,214,221**(1)(3)
$ 10,000,000 Mangrove Bay Passthru Trust, 6.102% 07/15/33 Capital Security, 144A**** ........ 9,773,700(1)
50,000 PartnerRe Capital Trust I, 7.90% 12/31/31 Pfd. ................................. 1,284,000**(1)
220,989 PartnerRe Ltd., 6.75% Pfd., Series C ........................................... 5,558,978**(1)
849,000 Principal Financial Group, 6.518% Pfd. ......................................... 23,419,665*
$ 8,000,000 Provident Financing Trust I, 7.405% 03/15/38 Capital Security .................. 7,902,600
110,000 Prudential PLC, 6.50% Pfd ...................................................... 2,845,700**(1)
Renaissancere Holdings:
105,000 6.08% Pfd., Series C ......................................................... 2,324,700**(1)
308,935 7.30% Pfd., Series B ......................................................... 7,795,975**(1)
15,000 8.10% Pfd., Series A ......................................................... 377,700**(1)
6
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Flaherty & Crumrine/Claymore Preferred Securities Income Fund Incorporated
PORTFOLIO OF INVESTMENTS (CONTINUED)
FEBRUARY 28, 2006 (UNAUDITED)
--------------------------------------------------------------------------
SHARES/$ PAR VALUE
-------------- -------
PREFERRED SECURITIES -- (CONTINUED)
INSURANCE -- (CONTINUED)
---------------------------------------------------------------------------------------------------------------------------
94,900 Saturns-AON 2003-3, 8.00% Pfd., Series AON ..................................... $ 2,471,196
56,000 Saturns-SAFC 2001-7, 8.25% Pfd., Series SAFC ................................... 1,443,680
432,200 Scottish Re Group Ltd., 7.25% Pfd. ............................................. 11,023,261**(1)
22,390 St. Paul Capital Trust I, 7.60% Pfd. ........................................... 570,609
$ 8,675,000 USF&G Capital, 8.312% 07/01/46 Capital Security, 144A**** ...................... 11,006,580
$ 17,000,000 USF&G Capital I, 8.50% 12/15/45 Capital Security, 144A**** ..................... 22,011,940
15,000 XL Capital Ltd., 7.625% Pfd., Series B ......................................... 386,775**(1)
-------------------------------------------------------------------------------------------------------------------
229,194,356
--------------
UTILITIES -- 14.7%
---------------------------------------------------------------------------------------------------------------------------
$ 3,750,000 AGL Capital Trust, 8.17% 06/01/37 Capital Security ............................. 4,012,275
10,000 Baltimore Gas & Electric Company, 6.70% Pfd., Series 1993 ...................... 1,039,350*
50,000 Baltimore Gas & Electricity, 7.125% Pfd., Series 1993 .......................... 5,194,000*
35,000 Central Maine Power, 5.25% Pfd., Pvt. .......................................... 3,337,950*
$ 8,700,000 COMED Financing II, 8.50% 01/15/27 Capital Security, Series B .................. 9,259,932
$ 10,395,000 COMED Financing III, 6.35% 03/15/33 Capital Security ........................... 10,256,123
23,883 Delmarva Power & Light, 5.00% Pfd. ............................................. 2,298,858*
61,800 Dominion CNG Cap Trust I, 7.80% Pfd. ........................................... 1,573,428
$ 10,175,000 Dominion Resources Capital Trust I, 7.83% 12/01/27 Capital Security ............ 10,836,528
$ 12,250,000 Dominion Resources Capital Trust III, 8.40% 01/15/31 ........................... 14,700,674
96,450 Duquesne Light Company, 6.50% Pfd. ............................................. 4,991,287*
161,400 Energy East Capital Trust I, 8.25% Pfd. ........................................ 4,112,472
Entergy Arkansas, Inc.:
10,240 4.56% Pfd., Series 1965 ...................................................... 874,240*
5,692 7.40% Pfd. ................................................................... 591,313*
Entergy Louisiana, Inc.:
85,000 6.95% Pfd., 144A**** ......................................................... 8,796,650*
60,792 8.00% Pfd., Series 92 ........................................................ 1,532,262*
Florida Power Company:
49,750 4.40% Pfd. ................................................................... 4,347,155*
21,585 4.60% Pfd. ................................................................... 1,971,790*
104,400 FPC Capital I, 7.10% Pfd., Series A ............................................ 2,626,704
12,442 Great Plains Energy, Inc., 4.20% Pfd. .......................................... 988,579*
37,800 Gulf Power Capital Trust III, 7.375% Pfd. ...................................... 968,247
19,000 Gulf Power Company, 6.00% Pfd., Series 1 ....................................... 1,971,630*
$ 17,262,000 Houston Light & Power Capital Trust II, 8.257% 02/01/37 Capital Security ....... 18,292,110
119,805 Indianapolis Power & Light Company, 5.65% Pfd. ................................. 11,505,473*
7
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Flaherty & Crumrine/Claymore Preferred Securities Income Fund Incorporated
PORTFOLIO OF INVESTMENTS (CONTINUED)
FEBRUARY 28, 2006 (UNAUDITED)
--------------------------------------------------------------------------
SHARES/$ PAR VALUE
-------------- -------
PREFERRED SECURITIES -- (CONTINUED)
UTILITIES -- (CONTINUED)
---------------------------------------------------------------------------------------------------------------------------
Interstate Power & Light Company:
110,000 7.10% Pfd., Series C ......................................................... $ 2,994,200*
11,000 8.375% Pfd., Series B ........................................................ 366,135*
32,300 Laclede Capital Trust I, 7.70% Pfd. ............................................ 838,024
5,000 Northern Indiana Public Service Company, Adj. Rate Pfd., Series A .............. 251,250*
Pacific Enterprises:
4,550 $4.40 Pfd. ................................................................... 388,388*
4,510 $4.50 Pfd. ................................................................... 393,723*
23,085 $4.75 Pfd., Series 53 ........................................................ 2,127,283*
3,000 PacifiCorp, $7.48 Sinking Fund Pfd. ............................................ 308,535*
$ 2,386,000 PECO Energy Capital Trust III, 7.38% 04/06/28 Capital Security, Series D ....... 2,673,835
$ 27,000,000 PECO Energy Capital Trust IV, 5.75% 06/15/33 Capital Security .................. 25,055,460
11,278 Portland General Electric, 7.75% Sinking Fund Pfd. ............................. 1,159,209*
365,750 PSEG Funding Trust II, 8.75% Pfd. .............................................. 9,780,155
Puget Sound Energy Capital Trust:
$ 8,200,000 8.231% 06/01/27 Capital Security, Series B ................................... 8,779,699
50,000 8.40% Pfd. 06/30/41 .......................................................... 1,279,750
200,000 San Diego Gas & Electric Company, $1.70 Pfd. ................................... 5,186,000*
Southern California Edison:
117,500 6.00% Pfd. ................................................................... 11,967,669*
31,900 6.125% Pfd. .................................................................. 3,331,748*
264,700 Southern Union Company, 7.55% Pfd. ............................................. 6,993,374*
$ 4,200,000 Union Electric Company, 7.69% 12/15/36 Capital Security, Series A .............. 4,436,103
Virginia Electric & Power Company:
21,684 $4.80 Pfd. ................................................................... 2,040,464*
14,985 $4.12 Pfd. ................................................................... 1,198,575*
103,700 Virginia Power Capital Trust, 7.375% Pfd. 07/30/42 ............................. 2,653,683
15,000 Wisconsin Power & Light Company, 6.20% Pfd. .................................... 1,537,125*
Xcel Energy, Inc.:
7,110 $4.10 Pfd., Series C ......................................................... 584,335*
10,210 $4.11 Pfd., Series D ......................................................... 841,202*
-------------------------------------------------------------------------------------------------------------------
223,244,954
--------------
OIL AND GAS -- 2.2%
---------------------------------------------------------------------------------------------------------------------------
13,200 EOG Resources, Inc., 7.195% Pfd., Series B ..................................... 13,893,132*
$ 5,000,000 KN Capital Trust III, 7.63% 04/15/28 Capital Security .......................... 5,571,875
$ 13,315,000 Phillips 66 Capital Trust II, 8.00% 01/15/37 Capital Security .................. 14,150,050
-------------------------------------------------------------------------------------------------------------------
33,615,057
--------------
8
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Flaherty & Crumrine/Claymore Preferred Securities Income Fund Incorporated
PORTFOLIO OF INVESTMENTS (CONTINUED)
FEBRUARY 28, 2006 (UNAUDITED)
--------------------------------------------------------------------------
SHARES/$ PAR VALUE
-------------- -------
PREFERRED SECURITIES -- (CONTINUED)
REAL ESTATE INVESTMENT TRUST (REIT) -- 5.8%
---------------------------------------------------------------------------------------------------------------------------
48,000 AMB Property Corporation, 7.00% Pfd., REIT, Series O ........................... $ 1,220,160
BRE Properties, Inc.:
76,200 6.75% Pfd., REIT, Series C ................................................... 1,909,953
203,800 6.75% Pfd., REIT, Series D ................................................... 5,098,057
260,000 Carramerica Realty Corporation, 7.50% Pfd., REIT, Series E ..................... 6,591,000
Duke Realty Corporation:
65,500 6.50% Pfd., REIT, Series K ................................................... 1,612,937
228,250 6.60% Pfd., REIT, Series L ................................................... 5,682,284
20,000 6.625% Pfd., REIT, Series J .................................................. 496,500
128,750 6.95% Pfd., REIT, Series M ................................................... 3,255,444
51,000 Equity Residential Properties, 8.29% Pfd., REIT, Series K ...................... 3,075,555
65,000 HRPT Properties Trust, 7.125% Pfd., REIT, Series C ............................. 1,628,575
4,980 Prologis Trust, 8.54% Pfd., REIT, Series C ..................................... 277,859
PS Business Parks, Inc.:
167,640 6.875% Pfd., REIT, Series I .................................................. 4,081,196
192,464 7.00% Pfd., REIT, Series H ................................................... 4,770,220
502,000 7.20% Pfd., REIT, Series M ................................................... 12,391,870
203,400 7.60% Pfd., REIT, Series L ................................................... 5,193,819
60,000 7.95% Pfd., REIT, Series K ................................................... 1,574,100
Public Storage, Inc.:
19,900 6.18% Pfd., REIT, Series D ................................................... 473,719
201,770 6.45% Pfd., REIT, Series F ................................................... 4,910,073
62,700 6.75% Pfd., REIT, Series E ................................................... 1,568,441
14,700 7.625% Pfd., REIT, Series U .................................................. 376,908
18,000 8.00% Pfd., REIT, Series R ................................................... 460,980
440,000 Realty Income Corporation, 7.375% Pfd., REIT, Series D ......................... 11,356,400
Regency Centers Corporation:
39,700 6.70% Pfd., REIT ............................................................. 968,879
263,000 7.25% Pfd., REIT ............................................................. 6,605,245
61,000 Vornado Realty Trust, 6.625% Pfd., REIT, Series I .............................. 1,491,755
-------------------------------------------------------------------------------------------------------------------
87,071,929
--------------
MISCELLANEOUS INDUSTRIES -- 0.6%
---------------------------------------------------------------------------------------------------------------------------
112,750 Ocean Spray Cranberries, Inc., 6.25% Pfd., 144A**** ............................ 9,295,110*
-------------------------------------------------------------------------------------------------------------------
9,295,110
--------------
TOTAL PREFERRED SECURITIES
(Cost $1,222,579,770) ........................................................ 1,254,575,702
--------------
9
--------------------------------------------------------------------------------
Flaherty & Crumrine/Claymore Preferred Securities Income Fund Incorporated
PORTFOLIO OF INVESTMENTS (CONTINUED)
FEBRUARY 28, 2006 (UNAUDITED)
--------------------------------------------------------------------------
SHARES/$ PAR VALUE
-------------- -------
CORPORATE DEBT SECURITIES -- 16.0%
FINANCIAL SERVICES -- 2.2%
---------------------------------------------------------------------------------------------------------------------------
200,000 Ford Motor Credit Company, 7.375% 10/15/31 ..................................... $ 4,009,000
$ 25,000,000 General Motors Acceptance Corporation, 8.00% 11/01/31, Senior Bonds ............ 22,935,000(3)
$ 4,902,500 Lehman Brothers, Guaranteed Note, Variable Rate, 12/16/16, 144A**** ............ 4,617,542
$ 2,200,000 Morgan Stanley Finance, 8.03% 02/28/17, Capital Units .......................... 2,300,782
-------------------------------------------------------------------------------------------------------------------
33,862,324
--------------
INSURANCE -- 1.4%
---------------------------------------------------------------------------------------------------------------------------
239,000 Delphi Financial, 8.00% 05/15/33, Senior Notes ................................. 6,196,075
$ 214,000 Liberty Mutual Group, 6.50% 03/15/35, 144A**** ................................. 214,250
$ 6,067,000 Liberty Mutual Insurance, 7.697% 10/15/97 144A**** ............................. 6,570,531
$ 6,400,000 OneAmerica Financial Partners, 7.00% 10/15/33 144A**** ......................... 7,022,016
$ 1,000,000 UnumProvident Corporation, 7.25% 03/15/28, Senior Notes ........................ 1,050,315
-------------------------------------------------------------------------------------------------------------------
21,053,187
--------------
OIL AND GAS -- 0.5%
---------------------------------------------------------------------------------------------------------------------------
296,911 Nexen, Inc., 7.35% Subordinated Notes .......................................... 7,681,088(1)
-------------------------------------------------------------------------------------------------------------------
7,681,088
--------------
UTILITIES -- 10.8%
---------------------------------------------------------------------------------------------------------------------------
$ 31,000,000 AEP Texas Central Company, 6.65% 02/15/33, Senior Notes, Series E .............. 33,759,000
$ 12,500,000 Constellation Energy Group, 7.60% 04/01/32, Senior Notes ....................... 15,231,875
$ 1,000,000 DTE Energy Company, 6.375% 04/15/33, Senior Notes .............................. 1,036,055
Duke Capital Corporation:
$ 11,179,000 6.75% 02/15/32, Senior Notes ................................................. 12,257,662
$ 10,000,000 8.00% 10/01/19, Senior Notes ................................................. 11,945,750(3)
$ 8,000,000 Duquesne Light Holdings, 6.25% 08/15/35 ........................................ 7,882,360
$ 5,000,000 Entergy Gulf States, Inc., 6.20% 07/01/33, 1st Mortgage ........................ 4,789,975
16,500 Entergy Mississippi, Inc., 7.25% 1st Mortgage .................................. 423,472
502,115 Georgia Power Company, 5.90% 04/15/33, Senior Notes ............................ 12,382,156
$ 3,000,000 Indianapolis Power & Light Company, 6.60% 01/01/34, 1st Mortgage, 144A**** ..... 3,250,035
40,000 Northern States Power Company, 8.00% ........................................... 1,049,000
$ 10,000,000 Oncor Electric Delivery Company, 7.25% 01/15/33 ................................ 11,745,650
$ 18,768,000 PSEG Power LLC, 8.625% 04/15/31 ................................................ 25,024,031
$ 6,300,000 TXU Corporation, 6.50% 11/15/24 ................................................ 6,014,043
$ 7,250,000 TXU Energy Company, 7.00% 03/15/13 ............................................. 7,670,718
$ 2,000,000 Westar Energy, Inc., 5.875% 07/15/36 1st Mortgage .............................. 1,963,570
$ 6,000,000 Wisconsin Electric Power Company, 6.875% 12/01/95 .............................. 6,891,870
-------------------------------------------------------------------------------------------------------------------
163,317,222
--------------
10
--------------------------------------------------------------------------------
Flaherty & Crumrine/Claymore Preferred Securities Income Fund Incorporated
PORTFOLIO OF INVESTMENTS (CONTINUED)
FEBRUARY 28, 2006 (UNAUDITED)
--------------------------------------------------------------------------
SHARES/$ PAR VALUE
-------------- -------
CORPORATE DEBT SECURITIES -- (CONTINUED)
REAL ESTATE INVESTMENT TRUST (REIT) -- 0.2%
---------------------------------------------------------------------------------------------------------------------------
$ 3,500,000 Realty Income Corporation, 5.875% 03/15/35 ..................................... $ 3,311,192
-------------------------------------------------------------------------------------------------------------------
3,311,192
--------------
MISCELLANEOUS -- 0.9%
---------------------------------------------------------------------------------------------------------------------------
$ 390,000 BellSouth Telecommunication, 7.00% 12/01/95 .................................... 411,604
47,000 Maytag Corporation, 7.875% 08/01/31 ............................................ 1,174,060(3)
Pulte Homes, Inc.:
$ 8,000,000 6.375% 05/15/33, Senior Notes ................................................ 7,617,360
$ 1,950,000 7.875% 06/15/32, Senior Notes ................................................ 2,196,772
$ 1,945,000 Verizon Maryland, 7.15% 05/01/23 ............................................... 2,037,203
-------------------------------------------------------------------------------------------------------------------
13,436,999
--------------
TOTAL CORPORATE DEBT SECURITIES
(Cost $231,956,244) .......................................................... 242,662,012
--------------
OPTION CONTRACTS -- 0.5%
1,800 April Put Options on June U.S. Treasury Bond Futures, Expiring 03/24/06 ........ 3,712,500+
1,500 June Call Options on June U.S. Treasury Bond Futures, Expiring 05/26/06 ........ 656,250+
2,491 June Put Options on June U.S. Treasury Bond Futures, Expiring 05/26/06 ......... 467,062+
5,609 June Put Options on June U.S. Treasury Bond Futures, Expiring 05/26/06 ......... 2,453,938+
-------------------------------------------------------------------------------------------------------------------
TOTAL OPTION CONTRACTS
(Cost $8,697,197) ............................................................ 7,289,750
--------------
11
--------------------------------------------------------------------------------
Flaherty & Crumrine/Claymore Preferred Securities Income Fund Incorporated
PORTFOLIO OF INVESTMENTS (CONTINUED)
FEBRUARY 28, 2006 (UNAUDITED)
--------------------------------------------------------------------------
SHARES/$ PAR VALUE
-------------- -------
MONEY MARKET FUND -- 0.7%
10,989,748 BlackRock Provident Institutional, TempFund .................................... $ 10,989,748
-------------------------------------------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost $10,989,748) ........................................................... 10,989,748
--------------
SECURITIES LENDING COLLATERAL -- 1.8%
27,697,960 Institutional Money Market Trust ............................................... 27,697,960
-------------------------------------------------------------------------------------------------------------------
TOTAL SECURITIES LENDING COLLATERAL
(Cost $27,697,960) ........................................................... 27,697,960
--------------
TOTAL INVESTMENTS (Cost $1,501,920,919***) ........................................ 101.8% 1,543,215,172
OTHER ASSETS AND LIABILITIES (Net) ................................................ (1.8%) (27,026,029)
-------- --------------
TOTAL NET ASSETS AVAILABLE TO COMMON STOCK AND PREFERRED STOCK .................... 100.0%++ $1,516,189,143
-------- --------------
AUCTION MARKET PREFERRED STOCK (AMPS) REDEMPTION VALUE ......................................... (542,000,000)
--------------
TOTAL NET ASSETS AVAILABLE TO COMMON STOCK ..................................................... $ 974,189,143
==============
----------
* Securities eligible for the Dividends Received Deduction and distributing
Qualified Dividend Income.
** Securities distributing Qualified Dividend Income only.
*** Aggregate cost of securities held.
**** Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration to qualified institutional buyers. These securities have been
determined to be liquid under the guidelines established by the Board of
Directors.
(1) Foreign Issuer.
(2) All or a portion of this security has been pledged as collateral for
written option positions.
(3) Security on loan.
+ Non-income producing.
++ The percentage shown for each investment category is the total value of
that category as a percentage of net assets available to Common and
Preferred Stock.
ABBREVIATIONS:
REIT -- Real Estate Investment Trust
PFD. -- Preferred Securities
PVT. -- Private Placement Securities
OPEN OPTION CONTRACTS WRITTEN
CONTRACTS CONTRACT DESCRIPTION VALUE
----------- -------------------- --------------
1,500 June Call Options on June U.S. Treasury Bond Futures,
Expiring 05/26/06, Strike Price 112 .......................................... $ (3,117,188)
-------------------------------------------------------------------------------------------------------------------
TOTAL OPEN OPTION CONTRACTS WRITTEN (premiums received: $3,206,956) .......... (3,117,188)
--------------
12
--------------------------------------------------------------------------------
Flaherty & Crumrine/Claymore Preferred Securities Income Fund Incorporated
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE TO COMMON STOCK(1)
FOR THE PERIOD FROM DECEMBER 1, 2005 THROUGH FEBRUARY 28, 2006 (UNAUDITED)
--------------------------------------------------------------------------
VALUE
-------
OPERATIONS:
Net investment income ................................................................ $ 21,113,975
Net realized gain/(loss) on investments sold during the period ....................... (3,064,252)
Change in net unrealized appreciation/depreciation of investments held
during the period ................................................................. 15,300,124
Distributions to Auction Market Preferred Stock (AMPS) Shareholders from net
investment income, including changes in accumulated undeclared distributions ...... (5,687,282)
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................................. 27,662,565
DISTRIBUTIONS:
Dividends paid from net investment income to Common Stock Shareholders(2) ............ (17,892,722)
-------------
TOTAL DISTRIBUTIONS TO COMMON STOCK SHAREHOLDERS ..................................... (17,892,722)
FUND SHARE TRANSACTIONS:
Increase from shares issued under the Dividend Reinvestment
and Cash Purchase Plan ............................................................ --
-------------
NET INCREASE IN NET ASSETS AVAILABLE TO COMMON STOCK RESULTING
FROM FUND SHARE TRANSACTIONS ...................................................... --
-------------
NET INCREASE IN NET ASSETS AVAILABLE TO COMMON STOCK
FOR THE PERIOD .................................................................... $ 9,769,843
=============
-----------------------------------------------------------------------------------------------------------
NET ASSETS AVAILABLE TO COMMON STOCK:
Beginning of period .................................................................. $ 964,419,300
Net increase in net assets during the period ......................................... 9,769,843
-------------
End of period ........................................................................ $ 974,189,143
=============
----------
(1) These tables summarize the three months ended February 28, 2006 and should
be read in conjunction with the Fund's audited financial statements,
including footnotes, in its Annual Report dated November 30, 2005.
(2) May include income earned, but not paid out, in prior fiscal year.
13
--------------------------------------------------------------------------------
Flaherty & Crumrine/Claymore Preferred Securities Income Fund Incorporated
FINANCIAL HIGHLIGHTS(1)
FOR THE PERIOD FROM DECEMBER 1, 2005 THROUGH FEBRUARY 28, 2006 (UNAUDITED)
FOR A COMMON SHARE OUTSTANDING THROUGHOUT THE PERIOD.
-----------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ..................................................... $ 22.64
------------
INVESTMENT OPERATIONS:
Net investment income .................................................................... 0.49
Net realized and unrealized gain/(loss) on investments ................................... 0.29
DISTRIBUTIONS TO AMPS* SHAREHOLDERS:
From net investment income ............................................................... (0.13)
From net realized capital gains .......................................................... --
------------
Total from investment operations ......................................................... 0.65
------------
DISTRIBUTIONS TO COMMON STOCK SHAREHOLDERS:
From net investment income ............................................................... (0.42)
From net realized capital gains .......................................................... --
------------
Total distributions to Common Stock Shareholders ......................................... (0.42)
------------
Net asset value, end of period ........................................................... $ 22.87
============
Market value, end of period .............................................................. $ 21.30
============
Common shares outstanding, end of period ................................................. 42,601,719
============
RATIOS TO AVERAGE NET ASSETS AVAILABLE TO COMMON STOCK SHAREHOLDERS:
Net investment income+ ................................................................... 6.35%**
Operating expenses ....................................................................... 1.14%**
-----------------------------------------------------
SUPPLEMENTAL DATA:++
Portfolio turnover rate .................................................................. 12%***
Total net assets available to Common and Preferred Stock, end of period (in 000's) ....... $ 1,516,189
Ratio of operating expenses to total average net assets available to
Common and Preferred Stock ........................................................... 0.73%**
(1) These tables summarize the three months ended February 28, 2006 and should
be read in conjunction with the Fund's audited financial statements,
including footnotes, in its Annual Report dated November 30, 2005.
* Auction Market Preferred Stock.
** Annualized.
*** Not annualized.
+ The net investment income ratios reflect income net of operating expenses
and payments to AMPS* Shareholders.
++ Information presented under heading Supplemental Data includes AMPS*.
14
--------------------------------------------------------------------------------
Flaherty & Crumrine/Claymore Preferred Securities Income Fund Incorporated
FINANCIAL HIGHLIGHTS (CONTINUED)
PER SHARE OF COMMON STOCK (UNAUDITED)
--------------------------------------------------------------------------
TOTAL DIVIDEND
DIVIDENDS NET ASSET NYSE REINVESTMENT
PAID VALUE CLOSING PRICE PRICE(1)
--------- --------- ------------- ------------
December 31, 2005 ...... $0.1400 $22.82 $19.30 $19.65
January 31, 2006 ....... 0.1400 22.83 21.03 21.19
February 28, 2006 ...... 0.1400 22.87 21.30 21.60
----------
(1) Whenever the net asset value per share of the Fund's Common Stock is less
than or equal to the market price per share on the payment date, new
shares issued will be valued at the higher of net asset value or 95% of
the then current market price. Otherwise, the reinvestment shares of
Common Stock will be purchased in the open market.
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
-----------------------------------------
1. AGGREGATE INFORMATION FOR FEDERAL INCOME TAX PURPOSES
At February 28, 2006, the aggregate cost of securities for federal income
tax purposes was $1,509,818,589, the aggregate gross unrealized appreciation for
all securities in which there is an excess of value over tax cost was
$40,073,760 and the aggregate gross unrealized depreciation for all securities
in which there is an excess of tax cost over value was $9,794,365.
15
[LOGO] Flaherty & Crumrine/Claymore
============================
PREFERRED SECURITIES
INCOME FUND
Quarterly
Report
February 28, 2006
www.fcclaymore.com
DIRECTORS
Donald F. Crumrine, CFA
Chairman of the Board
David Gale
Morgan Gust
Karen H. Hogan
Robert F. Wulf, CFA
OFFICERS
Donald F. Crumrine, CFA
Chief Executive Officer
Robert M. Ettinger, CFA
President
R. Eric Chadwick, CFA
Chief Financial Officer,
Vice President and Treasurer
Chad C. Conwell
Chief Compliance Officer,
Vice President and Secretary
Bradford S. Stone
Vice President and
Assistant Treasurer
Nicholas Dalmaso
Vice President and Assistant Secretary
Christopher D. Ryan, CFA
Vice President
Laurie C. Lodolo
Assistant Compliance Officer,
Assistant Treasurer and
Assistant Secretary
INVESTMENT ADVISER
Flaherty & Crumrine Incorporated
e-mail: flaherty@pfdincome.com
QUESTIONS CONCERNING YOUR SHARES OF FLAHERTY &
CRUMRINE/CLAYMORE PREFERRED SECURITIES
INCOME FUND?
o If your shares are held in a Brokerage
Account, contact your Broker.
o If you have physical possession of your shares
in certificate form, contact the Fund's Transfer
Agent & Shareholder Servicing Agent --
PFPC Inc.
P.O. Box 43027
Providence, RI 02940-3027
1-800-331-1710
THIS REPORT IS SENT TO SHAREHOLDERS OF FLAHERTY & CRUMRINE/CLAYMORE PREFERRED
SECURITIES INCOME FUND INCORPORATED FOR THEIR INFORMATION. IT IS NOT A
PROSPECTUS, CIRCULAR OR REPRESENTATION INTENDED FOR USE IN THE PURCHASE OR SALE
OF SHARES OF THE FUND OR OF ANY SECURITIES MENTIONED IN THIS REPORT.
ITEM 2. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of the report that includes the disclosure
required by this paragraph, based on their evaluation of these controls
and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR
270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or
240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17
CFR 270.30a-3(d)) that occurred during the registrant's last fiscal
quarter that have materially affected, or are reasonably likely to
materially affect, the registrant's internal control over financial
reporting.
ITEM 3. EXHIBITS.
Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of
the Sarbanes-Oxley Act of 2002 are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) FLAHERTY & CRUMRINE/CLAYMORE PREFERRED SECURITIES INCOME FUND
INCORPORATED
By (Signature and Title)* /S/ DONALD F. CRUMRINE
-------------------------------------------------------
Donald F. Crumrine, Director, Chairman of the Board
and Chief Executive Officer
(principal executive officer)
Date APRIL 12, 2006
----------------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /S/ DONALD F. CRUMRINE
-------------------------------------------------------
Donald F. Crumrine, Director, Chairman of the Board
and Chief Executive Officer
(principal executive officer)
Date APRIL 12, 2006
----------------------------------------------------------------------------
By (Signature and Title)* /S/ R. ERIC CHADWICK
-------------------------------------------------------
R. Eric Chadwick, Chief Financial Officer, Treasurer
and Vice President
(principal financial officer)
Date APRIL 12, 2006
----------------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.