Does anyone have experience with valuing a HY bond with a PIK toggle? If I had to speculate, I’d assume that in practice they’d be valued similar to a bond with an embedded option to defer and would be valued using a binomial/lattice model. Please enlighten me. Do these bonds typically include a step up on the interest rate if the issuer elects to toggle the PIK? I’ve seen deals where the issuer has to pay an additional 75 bps in the spread over the reference rate if it elects the PIK toggle and am wondering if this has been industry standard. Thanks!