easy · Debt Capital Markets bond-instruments-structures
What is the main reason an investor might find a PIK toggle note attractive despite its high risk?
- It offers a much higher potential yield (IRR) than standard cash-pay debt.
- It lets the holder defer or eliminate all tax owed on the accruing interest income.
- It carries an explicit sovereign guarantee backing both principal and coupon.
- It ranks ahead of senior secured lenders in any default recovery.
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