Mezzanine finance and corporate bonds

Abstract

The article deals with the problems of mezzanine finance in relation to corporate bonds. Firstly, attention is paid to definition of mezzanine finance. The term mezzanine finance is used as a term for hybrid forms of financing that combine elements of debt and equity financing. Mezzanine finance represents an alternative form of financing corporate activities. Secondly, possible forms of mezzanine finance are characterized. We can say that special types of corporate bonds (convertible bonds and option bonds) present instruments of mezzanin finance. Then, attention is focused on the problems of corporate bonds. Corporate bond is a security connected with the right to settlement of the sum owing and with the issuer’s obligation to meet this right. A corporate bond is one of the important instruments on the capital market, and at the same time it is a potential source of financial means for companies.mezzanine finance, corporate bonds, option bonds