Mezzanine Capital Definition

In finance, mezzanine capital is unsecured debt and preference shares or stock. Because risk of loss of investment is high, so company has to pay high interest on mezzanine capital. It is also called subordinated debt. According to Wikipedia, " Mezzanine capital is a subordinated debt or preferred equity instrument that represents a claim on a company's assets which is senior only to that of common shares.

Interest on mezzanine capital can be given cash or increase the principle amount of mezzanine capital. Some company can also issue convertible bond which may be convert into stock after given time.

Benefits of Mezzanine Capital

It is easy to get mezzanine capital and some investors invest quickly due to high return on it. Before investment, investors see the strong old record of company reputation through its financial statements. 
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Education : Mezzanine Capital Definition
Mezzanine Capital Definition
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