Benefits of mezzanine

  • Increasingly supply & demand of capital meet outside the traditional banking markets.
  • Mezzanine provides an alternative source of capital in the form of subordinated debt / guarantee capital:
    • Retrenching banks make it more difficult for companies to finance growth.
    • Mezzanine provider has no ambition to become a shareholder: no discussions about valuation, governance or an exit.
    • Mezzanine provides a temporary solution for a temporary problem
  • Better terms & conditions of banks as mezzanine strengthens the capital structure.
  • Diversification of financing instruments with additional flexibility:
    • Interest is tax deductible and only partly paid in cash.
    • No amortisation schedule; bullet repayment at maturity.