Considering your response, this would also mean that for PZN to issue current preferred for the special, it would have to do so at the current market price (around $15 the last time I looked which admittedly was a month ago) instead of the face value of $25. That helps to alleviate the fear of recieving a security worth very sustantially less than the tax or cash basis.
Of course, the issuance of these securities immediately effects the market price, as supply increases cause a drop.
It seems likely that PZN would issue an entirely new type of security with no market record so that they could value the security at face value, instead of a depressed market. The advantage to the company of issuing fewer shares is less continuing cash outflow going forward.
I note that when PAH issued preferred to maintain REIT status, its $25 face value had a market price of $21 by the time it posted to my account. Still, the company redeemed those shares after six months for face value plus dividends.