What Happens when a Mezzanine Loan is Called?

mezzanine-loan

Mezzanine debt loans occupy the risky echelon beneath the bank but ahead of the equity in a capital structure. They are naturally subordinated to the bank loan via an intercreditor agreement wherein the senior lender retains the power to block their interest or force them to standstill.

Unskilled Questioning and its Deal-killing impact on Acquisition Financing

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In the middle market, acquisition financing providers are regarded as super intelligent and hardworking. They have distinguished themselves at elite banks or consulting firms and possess the ability to synthesize voluminous levels of info into a coherent, succinct takeaway or observation. This skill is extremely valuable in attributing causation to business drivers in a financial model used to foretell the future.

The Unsavory Shape Shifting of Acquisition Financing Lenders

acquisition-financing

The deal world thrives on the belief that the institution providing acquisition financing will deliver on their promise. Lenders usually telegraph their capital capabilities early on during the sales pitch and give their deal sizes and hold levels for their fund.

Illuminating Mezzanine Debt Covenant Breakage

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Most mezzanine debt borrowers are rightly focused on the downside of breaking a covenant and for good reason. Most borrowers have had to deal with overly sensitive banks in the past which often exhibit trigger happy default notices during covenant breakages, especially when they want to get out of a loan.

The Experience Gap Secret of Middle Market Lending

mezzanine debt

Buried within the pedigreed bios of mezzanine debt lenders and private equity investors lies a secret plainly obvious to any average joe. While mezzanine debt lenders have strong educational and work backgrounds from large elite institutions, they usually lack real world experience of the kind that is valuable to understanding the businesses they seek to evaluate.