PIK Interest: Interest Paid in Kind and a Growing Balance
This lesson is part of the course
In this lesson
You split a fictional loan's coupon into cash interest and PIK interest, roll the balance forward as the PIK interest is added each quarter, and compute the balance at maturity and the total cash the lender receives.
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Lessons in this course
- Floating-Rate Cash Interest: Base Rate, Margin and Floor Locked
- Upfront Fees and Original-Issue Discount: The Lender's Real Yield Locked
- PIK Interest: Interest Paid in Kind and a Growing Balance Locked
- Delayed-Draw Tranches: Commitment Fees and Blended Yield Locked
- Call Protection: Prepayment Premiums and Yield if Repaid Early Locked
- Unitranche Splits: First-Out and Last-Out Pricing Locked
- Credit Losses: Expected Loss and the Yield after a Default Locked
- Deal Comparison Dashboard: Yield, Cash Yield, PIK and Losses Locked