Mezzanine finance

Mezzanine refers to a layer that falls between two others. In the case of finance, it comes between debt and equity.

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.

Most Popular

Ray Dalio’s shrewd $10bn bet on the collapse of European stocks
European stockmarkets

Ray Dalio’s shrewd $10bn bet on the collapse of European stocks

Ray Dalio’s Bridgewater hedge fund is putting its money on a collapse in European stocks. It’s likely to pay off, says Matthew Lynn.
3 Jul 2022
UK house prices are definitely cooling off – but are they heading for a fall?
House prices

UK house prices are definitely cooling off – but are they heading for a fall?

UK house prices hit a fresh high in June, but as interest rates start to rise, the market is cooling John Stepek assesses just how much of an effect h…
30 Jun 2022
Persimmon yields 12.3%, but can you trust the company to deliver?
Share tips

Persimmon yields 12.3%, but can you trust the company to deliver?

With a dividend yield of 12.3%, Persimmon looks like a highly attractive prospect for income investors. But that sort of yield can also indicate compa…
1 Jul 2022