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Navigating Payment-in-Kind Instruments
This chapter explores the utilization of payment-in-kind (PIK) instruments in the context of rising interest rates and their implications for borrowers and lenders. It discusses the evolving dynamics of private credit markets, highlighting the benefits and risks of PIK arrangements and the new concept of synthetic PIKs. The conversation provides insight into how these financial tools offer flexibility to borrowers while reshaping the landscape of debt management during challenging economic conditions.