Payment in fine
What is payment in fine for the repayment of loans in LBO context? How is it different from bullet repayment?
What is payment in fine for the repayment of loans in LBO context? How is it different from bullet repayment?
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I think you mean payment-in-kind. PIK usually means that a 'coupon' is paid with more principle due at maturity. Usually a company doesn't have the resources for cash coupon and has agreed with a lender to Pay in Kind.
For example - $1000 loan with $50 coupons cash would be a very vanilla bond. a $1000 bond with $100 PIK would have $0 cash coupons but at maturity you would received $100 in addition to the principle for every coupon due.
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