Mezzanine Means

These include subordinate debt and preference shares that fall in between senior debt and equity. Payment is made to these investors only after senior debt is serviced and upon complying with certain conditions such as adherence to coverage ratios and investment requisites related to project performance. The risks taken by mezzanine providers are lower than those of traditional equity investors. Since the use of mezzanine means of finance reduces the amount of equity required for the project, it works to the advantage of the project company.