Mezzanine refers to a layer that falls between two others. In the case of finance, it comes between debt and equity. Essentially, it is debt capital that has been subordinated to that provided by senior lenders (such as banks) and therefore carries a higher rate of interest.
It is generally used in management buyouts, and in other cases where a company has difficulty borrowing from a bank - perhaps because it is a new business, or simply because there is a lack of assets against which the bank can obtain security.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
-
Where are ISA savers and investors putting their money?With less than three months until the end of the tax year, where are ISA savers and investors putting their money? We look at the latest ISA trends.
-
More than £53 billion held in fixed-rate cash ISAs will mature by April - where should savers move their money?If your fixed-rate cash ISA is maturing soon, we look at the options available to you
