"more of the same paper" is not very clear. I take it to mean PIK certificates. I think that the meaning is: when you redeem a PIK, you don't get cash but another PIK. I am not sure how one can ultimately profit from PIKs on this basis. Perhaps a finance expert can say more.

"More of the same paper" is clear, but only in the context of financial markets. Paper is an informal, metaphorical term used to mean 'financial instrument(s)', so Michael's guess is correct. He presumably found it unclear because he is unfamiliar with financial services jargon. The text snippet is referring to a couple of methods for paying off debt, neither of which is particularly effective in this context, where their purpose is to stave off financial disaster, rather than to generate profit.

Generally "more of the same paper" means items of the same kind. As Michael answers your specific example. . Something (a bond, a coupon, a financial instrument of some kind) pays, or is possibly redeemed for more similar of the same type.