an Interest Rate feature that gives the Issuer or Borrower the option to pay all, half or none of the Interest for any period (generally during the Non-Call Period) in kind. Typically, an Interest Rate step up (often 75 bps, but sometimes higher) will apply to any portion of Interest that is paid in kind. PIK Toggles are attractive to Issuers and Borrowers because of the ability to “toggle” out of cash Interest payments in times of a Liquidity crunch — meaning if the Borrower or Issuer is short on cash, it can stop making cash Interest payments and just let the interest PIK.
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