Which of the following debt repayment profiles involves a growing principal amount over time?Pay in kind debtEquityMezzanine financeSenior Debt

To determine which of the options consists of a debt repayment profile with a growing principal amount over time, we need to analyze each type of financial instrument listed:

1. Pay in Kind (PIK) Debt:

   • PIK debt allows the borrower to pay interest in the form of additional debt rather than cash. This effectively increases the principal amount over time since the unpaid interest gets added to the principal balance.

2. Equity:

   • Equity is not a debt repayment profile but rather represents ownership in a company. Shareholders are not repaid principal as they would be in a debt agreement; instead, they benefit from dividends and capital appreciation.

3. Mezzanine Finance:

   • Mezzanine finance is a hybrid of debt and equity financing, typically used in the form of subordinated debt. While it may involve some levels of equity-like features, it primarily does not involve a growing principal amount in the same sense as PIK.

4. Senior Debt:

   • Senior debt is usually a fixed repayment structure where the principal is repaid according to a pre-agreed schedule. There is no mechanism for growing the principal amount over time in regular senior debt arrangements.

Based on this analysis, Pay in Kind Debt is the option that involves a growing principal amount over time due to the accumulation of unpaid interest.

Final Answer

Pay in Kind Debt.