easy · Debt Capital Markets secondary-trading-liquidity
A 'Payment-in-Kind' (PIK) interest feature allows the borrower to do which of the following?
- Convert the outstanding debt into common stock automatically at each year-end.
- Pay interest by increasing the principal amount of the debt instead of paying cash.
- Settle interest obligations using the company's physical inventory or pledged hard assets.
- Skip every scheduled interest payment entirely without penalty or any increase in the debt.
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