What is the intermediate debt?

Mezzanin's debt is a type of public company loans in which the creditor is particularly low to the company's assets in the event that he gets into liquidation before the debt settlement. In this situation, the creditor's claim will be a lower priority for all other creditors, except for the holders of the ordinary shares. As a result, this type of debt tends to carry higher costs for creditors than other loans. One is like a subordinate debt. This means that the current creditor gives the debtor more money with a special agreement that this new debt is subordinate, which means that it carries the same entitlement to assets. This differs from the ordinary shares in that its holders are more entitled to assets and priority in recipients of any dividend payments. In the case of liquidation, the holders of the preferred shares will be entitled to obtain the nominal value of their shares, provided that any money is left to them. Only after all preferred shares holders receive this payment from the liquidation will be the holders of the shares authorized to obtainback one of your money back.

In fact, most people who lend money classified as an intermediate debt often receive any money if the company goes into liquidation. This is because the debts that have forced liquidation will usually be so high that all assets will be ingested by demands from other creditors who have a higher priority. Because of this higher risk, mezzanine debt creditors require a higher return. This would be through higher interest payments on subordinate debt or higher dividend payments from preferred shares. It is often attached to the Mazzanin's debt.

Because the intermediate debt has such significant qualities, it is often provided by professional creditors. Some of them offer mezzanin investment funds. They are inherently risky, but with a higher potential return than many other types of investment fund. In many pRomes will be determined by the intermediate debt so that all interest payments are retained back until the loan capital is repaid. This can be useful for companies that resort to lending in such a way, especially for those who borrow to alleviate flow problems.