Nautical Term: Mezzamine financing
Definition of Mezzamine financing
Mezzamine financing refers to a combination of various financing instruments used in maritime projects. This financing structure typically includes a blend of equity, subordinated debt, completion guarantees, and bridge financing. The specific balance of these financing instruments changes as the risk profile of a project shifts from construction to operation.
For instance, consider a shipping company planning to build a new vessel. To finance this project, the company decides to use mezzamine financing. In this case, the financing structure would include a combination of equity, subordinated debt, completion guarantees, and bridge financing. As the project moves from construction to operation, the specific balance of these financing instruments would change accordingly.
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