At a glance
- The indicators measure PIK three ways: as a share of interest income, as the percentage of loans with an active PIK component by deal count, and as PIK's share of outstanding principal.
- PIK accounted for 2.86% of interest income on loans originated globally in the 12 months to Oct. 10, 2026, against 6.67% across outstanding loans at the end of the second quarter.
- For allocators, the indicators give a published reference for a manager's PIK share of interest income, cut by borrower size, sector and region.
Kroll and StepStone Group launched three payment-in-kind indicators on Oct. 30, a published measure of non-cash interest built into the firms' private credit benchmarks, which cover more than 28,000 direct lending instruments, 18,000 deals and 13,000 borrowers.
The indicators measure PIK three ways: as a share of interest income, as the percentage of loans with an active PIK component by deal count, and as PIK's share of outstanding principal. The historical data runs back to 2012, and the firms said the indicators let investors compare PIK usage across geographies, sectors and borrower sizes.
PIK accounted for 2.86% of interest income on loans originated globally in the 12 months to Oct. 10, 2026, against 6.67% across outstanding loans at the end of the second quarter. The two figures cover different loan cohorts and reporting periods, and the firms' data suggests PIK usage is moderating.
For allocators, the indicators give a published reference for a manager's PIK share of interest income, cut by borrower size, sector and region. An LP can ask what proportion of a portfolio's interest is being added to principal rather than paid in cash, then set the answer against loans of similar size in the same sector. Because the headline figure is income-weighted, a handful of large PIK loans and a broad drift across many borrowers can produce similar averages, which is why the deal-count and outstanding-principal measures sit alongside it.
Michael Dolan, president of financial advisory at Kroll, said the cash-versus-accrual split matters "when assessing liquidity, leverage, credit quality and ultimately value." Marcel Schindler, partner and head of private debt at StepStone, said visibility across markets, sectors and borrower sizes gives allocators "another dimension for assessing market dynamics."
The first practical use arrives at the next quarterly reporting cycle, when a manager's PIK share of interest income can be checked against the benchmark rather than taken from fund commentary.
Reported by the Who's investing desk from Alternative Credit Investor. Published . Corrections