Following tighter regulatory requirements from senior lenders, mezzanine debt is set to become an increasingly important source of capital for property investors and developers and those looking to refinance. Trident Real Estate Capital in the ANZ Property Journal looks at the typical terms of a mezzanine deal and how this sort of finance may boost expected returns for equity investors. The paper cautions investors to familiarise themselves with the real risks of mezzanine debt in order to weigh-up whether the expected return is commensurate with the additional risk and transaction complications involved.
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