GLOSSARY · CAPITAL & STRUCTURING
What is mezzaninefinance?
Debt that ranks behind the senior lender and ahead of equity. It costs more than senior debt because it carries more risk, and it is usually governed by an intercreditor deed.
IN PRACTICE
Used well, mezzanine reduces the equity a project needs and lets a sound scheme proceed sooner. Used badly, it turns an ordinary delay into a serious problem, because it is expensive and it accrues. I look at mezzanine with one question in mind: if the project runs six months late, does the structure still hold?
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