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· In finance, a debt obligation that allows the issuer to make interest payments either in cash or with additional bonds or notes.
· A "payment in kind, " or PIK, note.
· A type of junk-bond financing now favored by private equity firms making large acquisitions.
· An investment whose yield can increase if the issuer decides to exercise the option to pay in kind.
· An instrument used by Blackstone Group to finance its acquisition of Freescale Semiconductor, and by Bain Capital, Kohlberg Kravis Roberts, and Merrill Lynch in the leveraged buyout of hospital chain HCA.
· A form of risky lending analogous to doubling-down in blackjack.
· A form of risky borrowing common following periods of low default rates and excess liquidity.
-- S.P.
