Mezzanine
Financing

When you need capital beyond what your senior lenders will extend, look no further than mezzanine.
Mezzanine financing is a capital resource that sits between senior debt and equity in the capital structure and features the best of both worlds. When companies have maximized their senior debt borrowing capacity, and want to raise additional capital without depleting future senior debt capacity, they are typically left with two options: raise outside equity or utilize mezzanine financing.

From a structural standpoint, mezzanine financing is subordinate to senior debt, and does not usually require any amortization prior to maturity. With a 7-8-year bullet maturity, mezzanine is what we call patient capital – meaning that it supports growth, while also being less costly than direct equity issuance. A mezzanine-supported recapitalization is also an attractive alternative to an outright sale of the business or an equity raise, enabling owners to maintain control.

While it’s certainly not as well-known as other types of capital, we think you’ll find mezzanine to be an option well worth being acquainted with – and we can help you with just that.
Typical size
  • $10 million - $100 million
Typical uses
  • Recapitalizations
  • Growth capital
  • Leveraged buyouts
  • Management buyouts
  • Acquisitions
  • Shareholder buyouts
  • Refinancings
  • Balance sheet restructurings
Structural characteristics
  • Typically, subordinated debt with attached equity warrants
  • Principal repaid after senior debt has been fully amortized
  • Combination of cash coupon and deferred interest
  • Nominal warrants representing minority stake in issuer
Issuer benefits
  • Patient capital
  • Maintain control of the business
  • Fund growth goals or other needs beyond what their senior debt capacity will allow
OUR TWO CENTS
WHAT IS MEZZANINE 
FINANCING?
Hear Mark Hoffmeister, Matthew Harvey, Steve Szejner, and Julie Langdon share how mezzanine can transform businesses.
Perspectives
Transformation Capital
Enabling Companies to Leapfrog to the Next Level
The Prudential Private Capital Guide to Mezzanine Financing
Learn More
OUR PEOPLE
Businesses come
in many forms.
Shouldn’t
your capital do
the same?

“We have locations around the globe, but each office feels very local and specific to its surrounding culture. This has enabled us to get a good grasp on a variety of markets, and puts our partners at ease.”

STEVE SZEJNER
MANAGING DIRECTOR
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