Definition of Mezzanine financing:
Mezzanine debt has embedded equity instruments attached, often known as warrants, which increase the value of the subordinated debt and allow greater flexibility when dealing with bondholders. Mezzanine financing is frequently associated with acquisitions and buyouts, for which it may be used to prioritize new owners ahead of existing owners in case of bankruptcy.
Non-conventional funding that shares characteristics of both debt and equity. It comprises of equity-based options (such as warrants) and lower-priority (subordinate) debt, and is used commonly in financing acquisitions and buyouts. Convertible debentures (see convertible loan) are also an example of mezzanine financing. Also called mezzanine 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 companies and other senior lenders are paid.
How to use Mezzanine financing in a sentence?
- Mezzanine loans are most commonly utilized in the expansion of established companies rather than as start-up or early-phase financing. .
- This type of financing can provide more generous returns compared to typical corporate debt, often paying between 12% and 20% a year.
- Thanks to mezzanine financing , the firm was having no disputes between the equity partners, because everyone stood to gain or loose in equal amounts.
- Sometimes if you cant get a normal loan from a bank your last resort may be to get a mezzanine financing if you can find one.
- Mezzanine financing is a way for companies to raise funds for specific projects or to aide with an acquisition through a hybrid of debt and equity financing.
- We went over Mezzanine Financing and it really juvt confused me, so I took a break and left for the day.
Meaning of Mezzanine financing & Mezzanine financing Definition