The issuer of the bond has the contractual option to – either pay the obligations arising from the issue (interest payments, redemption) in cash, or – service them by issuing new bonds, and – thus postpone its payment obligations (pay-in-kind or payment-in-kind securities involve investors receiving more bonds in place of cash interest, valued at par value). – Such bonds are often used in leveraged buy-outs (those bonds are issued to help fund the big leveraged buy-outs). In times of tensions in the financial market, such as in the wake of the subprime crisis, experience shows that the proportion of such bonds of various maturities increases sharply. – See payment-in-kind loan, Toogle debt instruments. – Cf. Deutsche Bundesbank Monthly Report, April 2007, p. 21.
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/
Passende Formel
Kreuzpreiselastizität
Die Nachfragereaktion eines Gutes auf die Preisänderung eines anderen Gutes messen.
Variablen: QA Menge von Gut A; PB Preis von Gut B.
Anwendung: Zur Erkennung von Substitutions- und Komplementärbeziehungen.