Mezzanine Debt

For mezzanine debt that is incurred at the same time as bank.

Mezzanine debt. Mezzanine debt gets its name because it blurs the lines between what constitutes debt and equity. Private lending in the middle-market is relatively inefficient. It is the highest-risk form of debt but it offers some of the highest returns -- a typical rate is.

When a business needs funds for a significant project or acquisition traditional lenders may be unwilling to provide all of the money required. The maturity of mezzanine debt is typically five years or longer but the maturity for a particular issue often depends on the scheduled maturities of other debt in an issuers capital structure. A mezzanine loan is secured by a pledge of the equity of the entity such as a limited liability company that owns the mortgaged real estate.

Definition - What does Mezzanine Debt mean. Mezzanine financing if structured as debt is usually junior to the debt of a companys more traditional lenders such as the bank that issues its line of credit or any long-term loans. Mezzanine debt is a bank or private money loan that is subordinate to senior debt financing.

Are the traditional sources of financing including debt or equ. The mezzanine market really took off in the early 80s.

Both terms are often shortened to mezz financing and mezz debt. Mezzanine financing is a hybrid of debt and equity financing that gives the lender the right to convert to an equity interest in the company in case of default generally after venture capital.

The collateral for a Mezzanine loan is a pledge of the equitypartnership interests of the borrowing entity. From Wikipedia the free encyclopedia In finance mezzanine capital is any subordinated debt or preferred equity instrument that represents a claim on a companys assets which is senior only to that of the common shares. During the LBOs of the 80s the mezzanine portion of the capital structure accounted for 40 of the deal 50 from senior debt and the balance of.