European Mezzanine

摘要

Recently, mezzanine financing has been growing rather dramatically in Europe. We describe the characteristics of European mezzanine, the developments of the UK and Continental European mezzanine markets and the various financial instruments that are traded in the European market. We further study in detail a comprehensive dataset of recent European mezzanine deals, and analyse the determinants of the mezzanine credit spread on these deals employing a credit spread model recently used by Angbazo et al. (1998). We find that credit spreads on European mezzanine loans are lower for shorter maturity, term or bridge loans. Credit spreads further react sluggishly to corporate bond yields but do not react to their syndication.