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Mezzanine Financing

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Mezzanine capital In  finance ,  mezzanine capital  is any  subordinated debt  or  preferred equity   instrument  that represents a claim on a company's assets which is senior only to that of the  common shares . Mezzanine financings can be structured either as  debt  (typically an  unsecured  and  subordinated  note) or  preferred stock . Mezzanine capital is often a more expensive financing source for a company than  secured debt  or  senior debt . The higher  cost of capital  associated with mezzanine financings is the result of its being an unsecured, subordinated (or junior) obligation in a company's  capital structure  (i.e., in the event of  default , the mezzanine financing is only repaid after all senior obligations have been satisfied). Additionally, mezzanine financings, which are usually  private placements , are often used by smaller companies and may...