Hi guys,
what is the difference between a bullet loan and a PIK bond? The principal payment is due at the end of maturity in both cases right? As well as the accrued interest which has to be paid at the end?
I don't know exactly where the difference is. Maybe I just interpreted the concepts wrong.
Would be glad if someone can help.
Thanks.
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Apart from the overarching general difference between bonds and loans, which is that bonds are securities whereas loans are contractual agreements, bullet interest is normally paid twice a year whereas PIK interest accumulates and is paid off at the end.
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