The high yield bond market is continuing to show signs of undergoing a boom not seen since before the financial crisis, with the first placing of a payment in kind bond for two years. A PIK bond is a controversial debt instrument favoured by private equity firms to add leverage to their buyouts.

The €200m bond PIK notes, which priced with a 12.75% coupon, at 98 cents on the euro, were launched by Dometic, a Swedish white goods maker that was bought by private equity firm EQT for SEK 12bn (£1.2bn) in February. The firm had acquired Dometic from its bank creditors, who put the company on the market following a debt-for-equity swap.