Mezzanine Debt
Mezzanine debt is a subordinate loan secured by an ownership interest in the borrowing structure rather than the mortgaged property itself, sitting structurally between mortgage debt and equity. In CMBS market usage, it is often described as a subordinate loan to the parent of the mortgage borrower secured by the parent's equity ownership interest.
- Where it applies
- Generally, not specific to New York
- When it comes up
- Structuring; closing; workout
- Property types
- Commercial and multifamily structured finance
In practice
The enforcement pathway (equity foreclosure vs property foreclosure) changes timelines and stakeholder leverage in distress.
Related terms
Capital Stack and Structured Finance
- Capital Stack
- Common Equity
- Cure Right
- Intercreditor Agreement
- Mezzanine Financing
- Preferred Equity
- Standstill Period
General information, not legal, tax or financial advice.