Despite the Federal Reserve apparently nearing the end of its rate-hiking phase, borrowers likely haven’t yet felt the full impact of rapidly rising interest rates.

The following report discusses that impact and outlines flexible payment-in-kind (PIK) options borrowers might want to explore.

Those options include:

  • Converting a portion of senior debt interest to PIK
  • Junior capital facilities that feature the ability to toggle between cash pay and PIK
  • HoldCo PIK notes
  • Preferred equity structures that may include a PIK dividend and equity upside for the investor