mezzanine debt

Definition

Debt that incorporates equity-based options, such as warrants, with a lower-priority debt. Mezzanine debt is actually closer to equity than debt, in that the debt is usually only of importance in the event of bankruptcy. Mezzanine debt is often used to finance acquisitions and buyouts, where it can be used to prioritize new owners ahead of existing owners in the event that a bankruptcy occurs.

Use mezzanine debt in a sentence

You may find that your company is in mezzanine debt and will need to figure out a way to get what you are owed.

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Our company took over Barlow World, it was considered mezzanine debt, so I guess our company got a really good deal on the buy out.

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When looking at the accumulation of mezzanine debt of the business, Josie was careful to decide how to move forward with the execution of her newly hatched acquisitions.

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mezzanine class stock quasi-equity