What is ‘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.

Explaining ‘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.

Further Reading

  • Accountability with a kicker: Observations on the Florida A+ accountability plan – [PDF]
  • Introducing the Tax-Kicker Bond: Budget-Neutral Financing of Private Infrastructure by Back-End Participation in Future Tax Revenue Growth – [PDF]
  • Rectus femoris intrasubstance tear in a collegiate football kicker and its mechanism – [PDF]
  • German Sports Newspapers and Magazines (SNMs) Market: From the Perspective of Media Economics – [PDF]
  • The Envelope Theorem and Identification: Implications for Some Empirical Work in Economics and Finance – [PDF]
  • E. Banks, The Palgrave Macmillan Dictionary of Finance, Investment and Banking© Erik Banks 2010 – [PDF]