The rise of payment-in-kind (PIK) reflects both structural innovation and cyclical pressures. It is important to distinguish between proactive deal structuring and reactive measures tied to financial strain.
Context matters when evaluating PIK. When it is structured at origination, it could be a sign of borrower strength, while mid-life PIK amendments may indicate emerging stress.
When used thoughtfully, PIK can be a strategic, value-enhancing tool to support growth, preserve liquidity and improve lender returns.
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