PIK Debt Securities

April 29, 2015 by FundingSage -

(Payment in Kind) PIK Debt are bonds that may pay bondholders compensation in a form other than cash.³

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Definitioner

PIK

Payments in Kind

Payment in Kind (PIK Debt Securities)

(Payment in Kind) PIK Debt are bonds that may pay bondholders compensation in a form other than cash.³

Debt

Any obligation by one person to pay another. May be a primary (direct) obligation as in a Note, or a secondary (contingent) obligation as in a guaranty.³
This is an amount of money that a borrower owes to an individual, investor, or lending institution. In the finance world, the word “debt” is often associated with interest payments. For example, when an individual has a credit card limit of $5,000, the lender, usually a bank, is willing to lend the credit card holder $5,000 of credit. If the lender uses $500 of that total amount, they are now considered to be in $500 debt until the total amount is paid. Partial payment of an owed amount always encompasses interest.⁴