Mezzanine lenders
On some transactions, mezzanine lenders play a crucial role to
bridge the funding gap between equity and senior debt. Immediately
post GFC, senior lenders became less inclined to allow payment of
mezzanine debt or to permit restrictions on the senior lender's
priority, viewing mezzanine debt as a form of equity with the
corresponding risk and reward. However, the market for mezzanine
debt has since evolved, and now, it is not uncommon for mezzanine
lenders to push to retain some protections in relation to their
outstanding debt and security.
What follows below are, from a senior lender's perspective,
some of the more common concessions requested by a mezzanine
lender.
