easy · Debt Capital Markets bond-instruments-structures
Where does PIK debt typically sit in the capital stack relative to senior secured loans?
- It ranks strictly pari passu alongside the senior secured bank term loans.
- It sits senior to every other tranche with a first-priority claim on collateral.
- It is treated as common equity, carrying no fixed claim on the company's assets.
- It is structurally and contractually subordinated to senior secured debt.
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