Payment In-Kind


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Payment In-Kind

1. Describing a bond or preferred stock in which coupon payments or dividends come in the form of more bonds or shares, rather than cash. At times, the investor has the option of choosing whether to accept cash or payment-in-kind, but, more often, this option resides with the issuer. A problem with PIK securities for the issuer is the fact that it becomes tempting to pay bond coupons with more debt rather than cash when the company has a liquidity problem. Of course, doing this often adds to the issuer's liquidity problems. Likewise, payment-in-kind securities can hurt investors as they must pay taxes on the market value of these securities and may lack the cash to do so. Payment-in-kind bonds were not unusual during the private equity boom in the mid-2000s, but became rare during the credit crunch at the end of the decade.

2. The act of compensating the seller of a good or service with another good or service rather than money. See also: Barter.
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Acting NSW Minister for Industrial Relations, Verity Firth, said employers were often under the mistaken impression they can negotiate alternative arrangements, such as payment in-kind, with their workers.
5 percent subordinated debenture (due to payment in-kind of interest on Aug.
The Preferred Units generally will continue to be governed by their existing terms after the payment in-kind period.
30, 2010, AEI's parent company debt was composed of a $861 million senior secured term loan due 2014 and $188 million of payment in-kind (PIK) notes due 2018.
The Company reported a net loss of $1,530,000 for the nine months ended September 30, 2003 and, after non-cash charges of $648,000 for payment in-kind preferred stock dividends, a net loss per common share of $0.
Under the Company's Plan approximately US$1 billion in existing debt will be converted into US$250 million in senior secured debt, US$100 million in convertible payment in-kind debt and 91% of the shares of the restructured company.
Holders of impaired unsecured claims will receive a pro rata share of US$60 million in unsecured payment in-kind notes and 5 percent of the common shares of the restructured Company, while existing shareholders will retain 2 percent of the common shares of the restructured Company.
The Company will settle these obligations with a combination of unsecured payment in-kind notes and common shares of the restructured company.