Mezzanine finance

Mezzanine finance generally ranks below senior debt but above ordinary equity in the agreed capital structure. It can provide funding where senior borrowing capacity or immediate equity is insufficient. Its return may include interest and a contractual equity participation, but specific instruments differ. Subordination increases exposure to loss relative to senior lenders, while covenants, security and conversion or warrant features must be read from the agreement. It is not automatically ordinary shares and is not inherently free of repayment obligations.