Forget Treasuries -- Try These 3 Little-Known Bonds Instead Payment-In-Kind (PIK) Bond A payment-in-kind bond (PIK bond) gives the issuer the option of making interest and principal payments with either cash or additional bonds One of the most famous PIK bond issues came in 1989 when RJR Nabisco issued $1 billion of them as part of Kohlberg Kravis Roberts' well-known leveraged buyout of the company
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The LBO Value Equation - InvestingAnswers The LBO Value Equation Before we can look for companies that may become LBO targets, let's first look at what makes an LBO so profitable for a PE firm Not surprisingly, leveraged buyouts require massive amounts of leverage A PE firm borrows as much as the market will allow it to borrow because the byproduct of high leverage is high return on equity (ROE) In the TXU buyout, PE firms put up