easy · Debt Capital Markets bond-instruments-structures

Where does PIK debt typically sit in the capital stack relative to senior secured loans?

1. It ranks strictly pari passu alongside the senior secured bank term loans.
2. It sits senior to every other tranche with a first-priority claim on collateral.
3. It is treated as common equity, carrying no fixed claim on the company's assets.
4. It is structurally and contractually subordinated to senior secured debt.

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