# Mezzanine Financing

*Corporate Finance & M&A — Finicade finance glossary*

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.

**Also known as:** mezz debt, subordinated debt with warrants

**Related terms:** [Senior vs Subordinated Debt](https://finicade.com/glossary/senior-vs-subordinated-debt), [Leveraged Buyout (LBO)](https://finicade.com/glossary/lbo), [Preferred Stock](https://finicade.com/glossary/preferred-stock), [Private Equity](https://finicade.com/glossary/private-equity), [Convertible Bond](https://finicade.com/glossary/convertible-bond)

Source: https://finicade.com/glossary/mezzanine-financing