An intermediate term bond is a form of a long-term loan. From the perspective of the holder, it is a fixed income security with a maturity between 3-10 years. The holder gets a fixed payment of interest over a specified duration, from a company that has an acceptable credit rating. Most intermediate term bonds are for large capitalization companies, and are publicly traded on the bond market. Intermediate term bonds can be used for a variety of applications including working capital, equipment purchases, asset additions and acquisitions. Bonds are generally junior to bank loans on the balance sheet of the borrower. In some respects, mezzanine financing plays the same role for middle market sized companies as intermediate term bonds for large cap companies. Mezzanine financing is used by middle market companies for a variety of applications including acquisitions and growth. Its term is usually 5 to 7 years and the required principal payments are back ended so that the company can invest the proceeds of the loan, and grow the assets and cash flow of the business. In some cases, where the bond market is not available for buy-outs, mezzanine financing is used by large private equity funds to bring in sufficient capital to close their deals. A large difference between mezzanine financing and regular intermediate bonds is their level of liquidity as an asset class. Middle market mezzanine funds are generally private funds that do not trade on market, unlike public intermediate term bonds. The value of the mezzanine fund assets then is less variable to current interest rates and other financial market forces that affect publicly traded bonds and stocks. Classically speaking, a mezzanine loan has fixed interest payments, a fixed maturity, a security position, and required repayments, making it similar with intermediate term bonds.