"Lenders have a number of ways they can mask liquidity challenges with their underlying borrowers. Whether at origination or as part of the restructuring, PIK income is a proxy for borrowers who cannot currently service their debt."
"PIK makes up 6.7% of income among private credit funds at present, up from 5.4% a year ago. However, it's not a sustainable strategy because it creates a permanently heavy debt structure."
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