Definition of
PIK note
debt finance paying interest on note redemption a form of debt financing that pays interest only when the note is redeemed, although the interest rate is usually much higher than on ordinary debt. The issue of PIK notes constitutes the payment of interest for tax purposes, so if the notes are issued in the accounting period in which the interest accrues, the interest is tax deductible on an accrual basis and does not affect cash flow.
Related definitions of "PIK note"
- Full form payment-in-kind note
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