Charge and PIK notes: Difference between pages

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imported>Doug Williamson
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imported>Doug Williamson
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1. ''Law.''
Debt instruments based on non-cash payment of interest coupons.


A mortgage or other security attached to an asset or assets, which prevents dealing in those assets without the consent of the secured creditor.
Interest is usually recognised by an increase in the amount of principal owed by the borrower.




2. ''Tax.''
PIKs are generally either unsecured loans or deeply subordinated securities ranking just before equity in the capital structure.  


A charge on income.
This means that, in the event of a bankruptcy, PIKs are the last debts to be repaid, making them a high risk instrument for lenders and investors.  


 
In order to compensate lenders for the risk, PIKs have to offer significantly enhanced rates of return to investors.
3. ''Tax.''
 
An amount of tax payable.
 
 
4.
 
Any fee or other amount payable for services or facilities provided.




== See also ==
== See also ==
* [[Certificate of title]]
* [[Coupon]]
* [[Charge on income]]
* [[Equity]]
* [[Charged]]
* [[Interest]]
* [[Depreciation charge]]
* [[Notes]]
* [[Early Redemption Charge]]
* [[Payment in kind]]
* [[Expense]]
* [[Principal]]
* [[Finance charge]]
* [[Secured debt]]
* [[Fixed charge]]
* [[Subordinated debt]]
* [[Floating charge]]
* [[Unsecured debt]]
* [[Management charge]]
* [[Mortgage]]
* [[Secured]]
* [[Securitisation ]]
* [[Securitise]]
* [[Security]]
* [[Tax]]
 
[[Category:Accounting,_tax_and_regulation]]
[[Category:Compliance_and_audit]]

Revision as of 14:21, 22 August 2017

Debt instruments based on non-cash payment of interest coupons.

Interest is usually recognised by an increase in the amount of principal owed by the borrower.


PIKs are generally either unsecured loans or deeply subordinated securities ranking just before equity in the capital structure.

This means that, in the event of a bankruptcy, PIKs are the last debts to be repaid, making them a high risk instrument for lenders and investors.

In order to compensate lenders for the risk, PIKs have to offer significantly enhanced rates of return to investors.


See also