Documentation for payment in kind (PIK) loans is undergoing a make over at the moment following pressure from market participants.
Confusion about the documentation and how it affects the structure of PIK loans has been rife in recent years with many banks and corporates not too confident about the specifics.
The Loan Market Association (LMA) said it will be clearly defining market practice in the European secondary loan market.
LMA associate director Mike Johnstone sees the clarification for trading PIK instruments as essential for the marketplace.
Clifford Chance, the LMA’s regular legal adviser, can expect to be kept pretty busy over the next few months – as if it wasn’t busy enough.