glossary · what it means in a filing
Payment in kind
also called PIK · PIK interest
Payment in kind is interest a borrower settles by increasing the principal owed rather than by paying cash.
What it looks like in a filing
A fund books it as income in the period it accrues. Nothing arrives in the account, yet the coverage ratio the market watches improves — which is why the reported figure and the cash figure have to be read side by side.
What Kanonstone measures with it
Subtract payment-in-kind from reported investment income and the coverage ratio changes side for a large share of vehicles. Both measures are published together, never one without the other.