Mezzanine Finance

Mezzanine finance sits between senior debt and equity in the capital stack of a development project. It allows developers to increase total leverage beyond the maximum available from a senior lender, typically taking total LTC to 85–90% or LTGDV to 80–85%.

Mezzanine is priced above senior debt to reflect its subordinated position and higher risk. It is particularly suited to schemes where the developer has limited equity but a strong track record and a viable project, and where increasing gearing would improve equity returns significantly.