Kicker

DEFINITION of 'Kicker'

1. A right, exercisable warrant, or other feature that is added to a debt instrument to make it more desirable to potential investors by giving the debt holder the potential option to purchase shares in the issuer. The kicker may or may not actually be usable; often a certain breakpoint must be reached (such as a stock price above a certain level) before the kicker has any real value.

2. In real estate, an added expense that must be paid on a mortgage in order to get a loan approved. An example would be an equity stake in receipts of a retail or rental property.

BREAKING DOWN 'Kicker'

1. Kickers are essentially features that are added to "get the deal done", as they are exclusively for the benefit of lenders and used to add to their expected return on investment (ROI). A company that adds a kicker (for example, a rights offering) to a bond issue is only doing so because it will help get the entire issue into the hands of investors.

2. Real estate kickers can be shady practices, even illegal in some jurisdictions.

RELATED TERMS
  1. Kicker Pattern

    A two-bar candlestick pattern that is used to predict a change ...
  2. Call Warrant

    A financial instrument that gives the holder the right to buy ...
  3. Mandatorily Redeemable Shares

    Shares owned by an individual or entity which are required to ...
  4. Exploding Warrant

    An equity derivative investment instrument that gives that holder ...
  5. Harmless Warrant

    A warrant that requires the holder to surrender a similar bond ...
  6. Put Warrant

    A type of security that gives the holder the right (but not the ...
Related Articles
  1. Investing Basics

    Investing In Stock Rights And Warrants

    Many companies choose to issue rights or warrants as an alternative means of generating capital to avoid dilution of existing share value.
  2. Professionals

    Other Equities

    Series 7 - Equities Section 3: Other Equities
  3. Professionals

    Warrants and Rights

    Warrants and Rights
  4. Investing Basics

    Warrants And Call Options

    Warrants and call options are securities that are quite similar in many respects, but they also have some notable differences. Both give the holder the right, but not the obligation, to buy a ...
  5. Professionals

    Breakpoints

    FINRA/NASAA Series 66 Section 1 - Breakpoints. In this section breakpoints, letters of intent (LOI) and rights of accumulation.
  6. Options & Futures

    Warrants: A High-Return Investment Tool

    Discover the advantages of this largely unexploited investment vehicle.
  7. Professionals

    Reduced Sales Charges/Quantity Discounts

    Breakpoints A mutual fund company's scale of declining sales charges based on the amount invested is called the fund's breakpoint schedule. Below is an example of a breakpoint schedule ...
  8. Professionals

    Other Types of Equity Securities

    FINRA Series 6 Exam Study Guide - Other Types of Equity Securities. Other equity securities: American Depository Receipts (ADRs), rights, warrants, options, Excange traded funds(ETFs), Hedge ...
  9. Options & Futures

    A User's Guide To Warrants

    These investment vehicles are relatively uncommon in the United States, but they do still appear in U.S. markets.
  10. Professionals

    Warrants

    Although warrants are not very common any more, they are not all that hard to value in practice.
RELATED FAQS
  1. I own some stock warrants. How do I exercise them?

    Typically, stock warrants are derivative instruments added to new issues of stocks or bonds to make these issues more attractive. ... Read Answer >>
  2. In which of the following ways can investor qualify for a breakpoint ...

    The correct answer is c): A breakpoint allows an investor to qualify for a reduced sales charge based on the purchase size ... Read Answer >>
  3. Are warrants more desirable than options?

    Understand what stock warrants are, the differences between warrants and options, and learn whether warrants or options are ... Read Answer >>
  4. How are stock warrants different from stock options?

    A stock option is a contract between two people that gives the holder the right, but not the obligation, to buy or sell outstanding ... Read Answer >>
  5. Can warrants be written on any security?

    Read about the different kinds of securities that may have warrants written on them, including which types of warrants are ... Read Answer >>
  6. What is usability testing, and why is it so important in the Internet sector

    Learn why a company would want to conduct a usability test and what types of data and information become available with this ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center