Document background
The Mezzanine Loan Agreement is utilized when companies require financing that bridges the gap between senior debt and equity, typically for expansion, acquisitions, or major capital expenditure. This hybrid financing instrument, governed by Malaysian law, provides flexibility through features such as higher interest rates, potential equity participation, and subordination to senior debt. The document must comply with Malaysian financial regulations, including the Financial Services Act 2013 and Companies Act 2016, while incorporating necessary protections for both lender and borrower. The agreement includes detailed provisions on security, conversion rights, financial covenants, and intercreditor relationships, making it suitable for complex financing structures where traditional bank loans may not be sufficient or appropriate.
