Document background
The Mezzanine Debt Term Sheet is a crucial document used in complex financing transactions where there is a need for additional financing that sits between senior debt and equity in the capital structure. This document is particularly relevant in the Swiss market where sophisticated financing arrangements must comply with specific regulatory requirements and market practices. The term sheet serves as a preliminary agreement outlining the key commercial and legal terms of the mezzanine financing, including facility amount, pricing, security package, subordination arrangements, and any equity-linked features. It forms the basis for the detailed transaction documents and is typically used in situations such as leveraged buyouts, real estate developments, or corporate expansions where traditional bank financing alone is insufficient. The document must comply with Swiss financial regulations, including FINMA requirements and the Swiss Code of Obligations, particularly regarding security arrangements and subordination mechanics.
