AMERICAS DISTRESS DAILY: Rising PIK Debt Load Alarms Investors

Payment in kind debt is raising concerns that private credit funds are using it to mask a deterioration in loan quality, with some viewing it as a “shadow default rate” in the industry.

• Ratings companies have started to flag potential issues for some borrowers.

In Other News:

• Office Properties Income Trust has filed for bankruptcy, with the REIT entering into a deal with a group of noteholders that includes a roughly $1 billion debt-for-equity swap and $125 million in new money DIP financing.
• Brazil’s credit flareups are driving up borrowing costs and spooking investors, forcing companies in Latin America’s largest ...