The layer of debt that sits in between senior debt and equity. With much fewer rights than senior debt, it carries a higher interest rate. Depending on negotiations, mezzanine can include cash paying interest, rolled up interest (not paid until the debt is redeemed), and occasionally warrants on the equity of the business. The providers of mezzanine debt broaden out from banks, to include mezzanine funds and occasionally hedge funds. The Alternative Oxford Private Equity Dictionary
