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PIK (Payment-in-kind) securities

Highly bonds or preferred stock that pay interest or dividends through additional bonds or preferred stock.

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.


References in periodicals archive ?
This press release shall not constitute an offer to sell or the solicitation of an offer to buy the PIK Debt.
Halifax Stanfield is the fifth Canadian airport to launch the PIK technology in 2017.
Water Pik is a water flosser brand and replacement shower head brand in the US.
In addition, PIK Group has placed bonds for RUB 10bn and signed a loan agreement with one of the biggest Russian banks for additional RUB 10bn loan at a more comfortable interest rate, which together will allow to refinance 85% of Morton Group's expensive short-term debt.
Each PIK Group GDR represents one ordinary share and trades on the London Stock Exchange under the symbol "PIK.
Water Pik has more than 50,000 distribution points, according to MidOcean.
Overall, the news was expected and we find that PIK is right in cautiously setting lower end for the SPO price, taking market apprehension about company financials, which we see as unjustified.
In 1978 is Pik Botha een van drie kandidate om die nuwe Eerste Minister te word, maar P.
262bn aggregate principal amount of old PIK notes, representing 88%, were validly tendered and not validly withdrawn in the exchange offers.
For those who didn't hear it, despite repeated hectoring from Evans, pik refused to answer any questions about his private life.