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Subordinated debt accounts for 15% to 20% of total financing and comprises:
- Mezzanine loans, which are hybrid products combining traditional returns with capitalised returns. Their remuneration can be in the form of cash interest payments, re-invested interest or equity warrants. Most large deals have a mezzanine layer and mezzanine loans have grown very rapidly over the past few years.
- High-yield bonds, issued on capital markets, are used to replace the mezzanine layer.
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