Document background
The Mezzanine Loan Term Sheet is a crucial document used in complex financing transactions where there is a need for additional funding beyond senior debt but before pure equity. This document is typically employed when companies require growth capital, acquisition financing, or real estate development funding in Hong Kong. The term sheet sets out the principal terms and conditions of the mezzanine facility, including the unique aspects of subordination to senior debt and any equity-linked components. It serves as a roadmap for the transaction and forms the basis for the preparation of detailed facility documentation, incorporating specific requirements under Hong Kong law and market practice. The document is particularly important as it addresses the hybrid nature of mezzanine financing, combining elements of debt and equity, and establishes the framework for intercreditor relationships.
