Do you know what is payment-in-kind bond?
A bond that instead of sending you cash as a coupon payment can send you more debt. These are usually not good credits.
deeply sub-ordinated pieces of paper, with very high coupon rates, although, accrete as more bonds. means your debt increases and therefore so does leverage. think HY companies. was a bull market instrument as PE firms used to take out their slice of initial equity (skin in the game) via a dividend.
That would be an excellent title to a movie. Sylvester Stallone stars in “Payment in Kind!”
Like JoeyD said, instead of making an actual payment they just add it to the principal amount.
LOL. I would watch that movie.