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Fears Grow About Overheated US Debt Market

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COV LITE LOANS & PIK TOGGLE NOTES
Cov Lite loans and Pik toggle notes? And you thought you knew everything about modern shady financial practices. According to the Financial Times, "some of the most controversial financing practices of the credit-bubble years – from cov lite loans to Pik toggle notes and dividend recap exercises – have returned to Wall Street, stoking fears that debt markets are growing overheated."

"In a cov light – short for covenant light – loan, borrowers are granted credit with few, if any, conditions.Pik toggle transactions make it possible for debt to be repaid with more debt – payment-in-kind notes."
SOURCE:   Financial Times

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