Mezzanine Equity

Mezzanine equity refers to a type of financing that lies between senior debt and common equity in a company's capital structure. It is a hybrid form of financing that combines features of debt and equity instruments. Mezzanine equity typically takes the form of subordinated debt or preferred equity. It is considered to have a higher risk profile compared to senior debt because it ranks lower in priority for repayment in the event of bankruptcy or liquidation. However, it is less risky than common equity as mezzanine investors have a higher claim on the company's assets and cash flows.