Mezzanine Financing
Also called: mezz debt, subordinated debt with warrants
Mezzanine sits between senior debt and equity — subordinated, often with payment-in-kind interest and warrants attached. It fills the gap when senior lenders stop and the sponsor doesn't want to write more equity. The pricing reflects the position: mid-teens all-in returns, with recovery in a default typically far below senior debt and above nothing at all.