// definition
PIK
Payment In Kind
Short definition
Compensation in kind: interest added to a debt claim or dividends paid in securities, without immediate cash payment. PIK may be part of the original contract; its presence alone does not establish financial distress.
risk atlas
Knowledge map
Intuition
PIK interest increases the claim instead of generating immediate cash. PIK dividends are a separate form of compensation in securities.
Formula
With no other movements: future debt = opening debt + capitalised interestWhy it matters now
Distinguish contractual PIK from a deferral negotiated under pressure, and assess whether the final amount remains repayable.
Related analyses
- Private credit’s test of patienceCapitalized interest, cash received and PIK introduced after loan closing.
- Private credit: software debt faces the AI testOTF PIK calculation and the gap between income and cash receipts.
- Private credit, default and gatingDefaults, capped redemptions and regulator vigilance.
- The silent contagion of private creditBridges between banks, insurers, BDCs, crypto and stablecoins.
- Zombie funds and private valuationsPrivate marks, hard exits and the illusion of stability.
Related guides
- Analysing private creditValuation, liquidity, leverage, covenants and breaking points.
Related datasets
- debt-risk.jsonDebt Risk Radar snapshot with provenance.
- risk-diff.json1, 7 and 30-day diff of signals, sources and models.
- evidence-graph.jsonClaims, evidence and their sources as a graph.
- catalog.jsonMachine-readable catalogue of l0g surfaces.
Signals using it
- MethodologyDebt, interest burden, current stress and structural vulnerability.
- Risk DiffRecent change in risk and source freshness.
- Black Box RecorderHashed frames to replay a point-in-time state.
Primary sources
- BIS Bulletin 128PIK definition, footnote 7.
- SEC EDGARBDC filings, 10-K, 10-Q, 8-K and institutional disclosures.
- Financial Stability Board & OFRNon-bank intermediation, financial stability and monitors.
- International Monetary FundGlobal Financial Stability Report and funding stress.
- Bank for International SettlementsGlobal credit, NBFI and market vulnerabilities.