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Mezzanine Debt Financing

“Patient capital” that supports growth while mitigating cost
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OVERVIEW

OVERVIEW

Mezzanine Financing

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.

Hear Julie Langdon, Mark Hoffmeister, Matthew Harvey, and Steve Szejner share how mezzanine can transform businesses.

Typical size, structure, uses, and benefits ▼

Typical size

  • Subordinated debt: $10 million - $100+ million
  • Preferred equity: $10 million - $50+ million

Typical uses

  • Recapitalizations
  • Growth capital
  • Leveraged buyouts
  • Management buyouts
  • Acquisitions
  • Shareholder buyouts
  • Refinancings
  • Balance sheet restructurings

Structural characteristics

  • 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, acquisitions, or other needs beyond what their senior debt capacity will allow

Case Study

See All Case Studies
Enhancing road safety: investments in technology
Pricoa Private Capital supports TTC Group’s management buyout with one-stop financing
“As a management team we see significant opportunity to scale TTC into new markets, and are delighted that Pricoa Private Capital shares this vision.”
Get the Full Story

Case Study

Enhancing road safety: investments in technology
Pricoa Private Capital supports TTC Group’s management buyout with one-stop financing
“As a management team we see significant opportunity to scale TTC into new markets, and are delighted that Pricoa Private Capital shares this vision.”
See The Full StorySee all case studiesSee The Full Story

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Who we work with

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“Companies can turn to mezzanine financing instead of, or in addition to, other types of capital to obtain the funds they need to accomplish their goals.”
Nik Miller, Vice President, Pricoa Private Capital
“Companies can turn to mezzanine financing instead of, or in addition to, other types of capital to obtain the funds they need to accomplish their goals.”
Nik Miller, Vice President, Pricoa Private Capital

OUR Team

With representatives around the world, finding the right person is easy.
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OUR Team

Meet our team

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Donald Campbell headshot
Donald Campbell
Managing Director
+44 207 621 8426
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Corporate Mezzanine
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Mark Hoffmeister headshot
Mark Hoffmeister
Managing Director
+1.312.540.4215
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Corporate Mezzanine
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Paul Meiring headshot
Paul Meiring
Managing Director
+1.212.626.2071
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Corporate Mezzanine
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Nikolas Miller headshot
Nikolas Miller
Vice President
+1.312.540.4238
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Corporate Mezzanine
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Eric Seward headshot
Eric Seward
Managing Director
+1.212.626.2062
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Corporate Mezzanine
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Steve Szejner headshot
Steve Szejner
Managing Director
+1.312.565.6265
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Corporate Mezzanine
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Insights

Transformation capital: enabling companies to leapfrog to the next level
The Pricoa Private Capital Guide to Mezzanine Financing
Read More
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