Some financial instruments are often referred to as "quasi" or "hybrid" debt or equity instruments as they have traits that are both debt and equity. Quasi instruments can include subordinated convertible debt, mezzanine, and yield-based preferred shares. They are often structured with warrants or options and have a claim to assets that is between traditional debt and equity instruments.
Quasi instruments are an attractive alternative to traditional equity or debt financing for a number of reasons. First, from the sponsor's perspective, it does not require them to relinquish any control or voting rights as it would if they were to issue common shares. Second, in exchange for a claim to assets superior to equity, the cost of quasi debt/equity capital is less. Third, this type of financing provides greater flexibility as it does not have the same restrictive covenants as traditional debt financing.