Take your Pik and take your chances

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Payment-in-kind instruments - where issuers pay a coupon in the form of more bonds, rather than in cash - have become an important funding vehicle for private equity houses over the last couple of years. Many have used Piks as bridge financing, either to help fund leveraged buyouts (LBOs) or cash out an existing investment prior to a full sale or listing.

But until now not many Pik-issuing companies have successfully completed a market listing. So while most Piks are structured and sold as br