Glossary / finance terms
Payment-in-kind (PIK) interest
Interest that is added to principal instead of being paid in cash. In ABS, junior classes may switch to PIK when a trigger is hit.
In the filed deals
Sabey's 2025-2 ABS reportedly allows Class B interest to PIK below 1.30x DSCR.
For in-house counsel
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Explanatory definition, not a statement that a particular transaction contains this term or a substitute for its contractual definition.
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