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Mezzanine Financing

When you need capital beyond what your senior lenders will extend, look no further than mezzanine.
our two cents

What is Mezzanine Financing?

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

From a structural standpoint, mezzanine financing is subordinate to senior debt, and does not usually require any amortisation 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 recapitalisation 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.
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
Typical size
  • US$10 million - US$100 million
Typical uses
  • Recapitalisations
  • 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 amortised
  • 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
perspectives

Transformation Capital

Enabling Companies to Leapfrog to the Next Level
The Pricoa Private Capital Guide to Mezzanine Financing
learn more
Portfolio Companies
We have an investment portfolio of US$5.9 billion in mezzanine finance as of 30.6.21.
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Pricoa Private Capital (‘PPC’) is a trading name of PGIM, Inc. (‘PGIM’), the principal asset management business of Prudential Financial, Inc. ('PFI'), and it is also a trading name of PGIM Private Capital Limited and PGIM Private Capital (Ireland) Limited. In the United Kingdom, information is issued by PGIM Private Capital Limited with registered office: Grand Buildings, 1-3 Strand, Trafalgar Square, London, WC2N 5HR. PGIM Private Capital Limited is authorised and regulated by the Financial Conduct Authority (“FCA”) of the United Kingdom (Firm Reference Number 172071) and registered in England No. 1331817. In the European Economic Area (“EEA”), information is issued by PGIM Private Capital (Ireland) Limited with registered office: Pramerica Drive, Letterkenny Business and Technology Park, Letterkenny, Co Donegal, F92 W8CY, Ireland. PGIM Private Capital (Ireland) Limited is authorised and regulated by the Central Bank of Ireland and registered in Ireland under company number 635793 operating on the basis of a European passport. In certain EEA countries, information is, where permitted, presented by PGIM Private Capital Limited in reliance of provisions, exemptions or licenses available to PGIM Private Capital Limited under temporary permission arrangements following the exit of the United Kingdom from the European Union. These materials are issued by PGIM Private Capital Limited and/or PGIM Private Capital (Ireland) Limited to persons who are professional clients as defined  under the rules of the FCA and/or to persons who are professional clients as defined in the relevant local implementation of Directive 2014/65/EU (MiFID II).