Buzzword: Payment-in-kind note
A rude awakening brings us this week’s Marketplace Money buzzword: Payment-in-kind note.
A payment-in-kind note is when a company uses a bond, instead of cash, to pay interest they owe. Kind of like paying a debt with an IOU. Well, very kind indeed!
Payment-in-kind notes are usually given by large private equity firms to investment bankers that lend them money. But thanks to the credit meltdown, more of these notes are being refused. And Standard & Poor’s says banks accepting them might not get their money’s worth. That’s what you get for depending on the kindness of strangers.
Stories You Might Like
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
