mezzanine financing

Mezzanine financing

The next stage of financing that follows venture capital financing.

Mezzanine Financing

A type of debt financing whereby a company issues debt that the holders may convert into equity if the debt is not repaid in due course. This debt carries a high interest rate, as there is little or no collateral, but it is low-risk compared to other forms of debt financing because of its convertibility. Mezzanine financing is listed on a company's balance sheet as an asset; some companies use mezzanine financing because it makes it easier for them to obtain financing from other sources. Mezzanine financing is sometimes associated with leveraged buyouts.

mezzanine financing

High-yield debt issued in connection with a leveraged buyout.

mezzanine financing

A hybrid of debt and equity funding.Usually shortened to “mezz financing.” The provider loans money on a second or even third mortgage basis and may either take an ownership interest in addition or may reserve the right to take over an ownership interest if the loan is not paid on time and in full.The loans are generally extended in emergency situations, such as to buy property quickly before bank lending can be arranged, or to engage in expansion activities and “grow” a company out of a cash crunch that is preventing it from securing a conventional loan. Because of the subordinate nature of the debt,the risky nature of the activities being funded by the money, and the lack of time to perform due diligence, mezz lenders usually want a high return on their money,in the 20 to 30 percent range.

References in periodicals archive ?
In this CLE course our panel of key thought leaders and practitioners, assembled by The Knowledge Group, will discuss the fundamentals of Mezzanine Financing and the most current and significant issues surrounding this topic.
Mezzanine financing is capital investment that bridges the gap between debt and equity.
Without access to mezzanine financing, the borrower would have been required to make a significant equity contribution.
MUSCAT: Renaissance Services, Oman-based multinational oil and gas services provider, has announced that its recent issue of subordinated loan notes of RO40 million to Omani investors has been fully subscribed in the largest mezzanine financing offer by a non-banking company in the Sultanate of Oman to date.
Customers who get mezzanine financing may also want senior financing and treasury management services through Huntington.
Summary: NBK Capital announced today that its NBK Capital -- GSC Mezzanine Fund I has completed its fourth transaction by committing $20 million in mezzanine financing to Metito Utilities, a leading water and wastewater treatment solution provider.
The venture, the first of its kind in the MENA and Turkey region, currently has $115 million available to fund mezzanine financing in the area, a sign that there is strong interest in this new financing concept.
Michaels announced that Carlton has successfully closed $215 million of acquisition and mezzanine financing for the acquisition of 1250 Broadway, a 39-story, 770,000 s/f office tower located on Broadway between West 31st and 32nd Streets in Manhattan.
Most firms fall into the category "sponsored mezzanine," when a company is being acquired by a private equity group that utilizes mezzanine financing to round out the capital structure.
ARCS COMMERCIAL MORTGAGE, CALABASAS Hills, California, has formed Topanga Funding LLC, a mezzanine financing affiliate, to be led by James R.
together with its affiliates, "KKR") today announced that affiliate investment vehicles and accounts advised by KKR Asset Management LLC ("KAM") led the [euro]105 million mezzanine financing, which included leading credit investor Sankaty, as part of the acquisition of IMCD Group ("IMCD") by Bain Capital Partners LLC.
Typically, a company seeks mezzanine financing for rapid internal expansion, external acquisition opportunities, debt restructuring, succession planning, and/or management or leveraged buyouts.