Mezzaninelaina

Mezzaninelaina is the Finnish term for mezzanine financing, a form of subordinated debt used to bridge capital gaps between senior debt and equity. In corporate and real estate finance, mezzanine loans provide additional capital to fund expansion, acquisitions, or development projects, while offering lenders higher returns in exchange for greater risk and subordinate repayment priority.

Key characteristics include subordination to senior debt but seniority over equity, higher interest rates, and often an equity kicker such as warrants or conversion rights. Terms typically involve maturities of three to seven years, with interest-only periods or bullet repayments at maturity, and they may be unsecured or secured by junior assets. Covenants are common, and arrangements can include voting or control provisions for lenders.

Mezzaninelaina is usually used when the borrower has insufficient senior financing or wants to avoid diluting equity. It is common in leveraged buyouts, real estate development, and growth financings where sponsors seek to maximize leverage without surrendering additional ownership. While it increases the cost of capital, it can enable faster execution and preserve equity for founders or existing shareholders.

Etymology and usage: the term combines mezzanine, referring to the intermediate floor in a building, with laina, the Finnish word for loan. Internationally, the concept is known as mezzanine debt or mezzanine financing and is widely discussed in private equity and real estate finance literature.

See also: mezzanine debt, subordinated debt, equity kicker, bridge loan.