PIK note (loan)7 Mar 2020 13:15
Just to be clear what a PIK loan is as there seems to be some misunderstanding between investors here.
A "payment-in-kind" (PIK) note (or loan) is a way for companies to borrow money. When issuing a bond, a company typically borrows a fixed amount of money, for a fixed period of time, and pays a fixed amount of interest every year. With a PIK note, rather than pay interest each year, the interest is rolled up (capitalised) and added to the principal (hence the name, payment in kind you are being asked to forgo annual interest payments in exchange for a higher overall payment at maturity).