Use of Public Debt Mezzanine Instruments in the Czech Republic

Svedik, Jan; Tetrevova, Libena

doi:10.1016/j.sbspro.2015.11.393

Cited by 6 publications

(6 citation statements)

References 8 publications

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“…Since this type of financial mechanism primarily involves debt (with some features of equity capital) occupying thus an intermediate position between senior debt and common equity shares, the mezzanine debt is also called quasi-equity (Regan et al, 2013;Zhang, 2005). That is why mezzanine debt represents a hybrid form of financing combining the features of equity and debt (Svedik and Tetrevova, 2015). The term mezzanine evolved from architecture, where mezzanine means an intermediate storey.…”

Section: Mezzanine Debtmentioning

confidence: 99%

Investment valuation model for sustainable infrastructure systems

González-Ruiz

Arboleda

Botero

et al. 2019

ECAM

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Purpose The purpose of this paper is to develop an investment valuation model using the mezzanine debt mechanism based on blue bonds that explicitly allude to public–private partnerships (P3s) and project finance (PF). Additionally, this study proposes the financial captured value (FCV) theory for measuring how much financial value lenders may capture by becoming sponsors through financing of sustainable infrastructure systems (SIS). Design/methodology/approach The investment valuation model was validated through the Aguas Claras wastewater treatment plant as a case study. Findings The empirical results show that lenders may capture financial value by converting outstanding debt into equity shares throughout the operation and maintenance stage. Furthermore, case study results provide new insights into the implications of the debt–equity conversion ratio on the relationship between the sponsors’ internal rate of return and the FCV. Research limitations/implications The most significant limitation is the lack of primary and secondary information on blue bonds. Thus, robust statistical analyses to contrast results were not possible. Practical implications Researchers and practising professionals can improve their understanding of how mezzanine debt, P3s and PF into an investment valuation model allows financing SIS using a non-conventional financial mechanism. The recommendations will benefit both the academia as well infrastructure industry in bridging the gap between design theory and practice. Originality/value Sustainability components have not been addressed explicitly or combined in the financing’s structuring. Therefore, the investment valuation model could be considered a novel methodology for decision making related to financing and investment of SIS.

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Section: Mezzanine Debtmentioning

confidence: 99%

Investment valuation model for sustainable infrastructure systems

González-Ruiz

Arboleda

Botero

et al. 2019

ECAM

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“…Participating bond is an analogue of participating loan and represents corporate bond whose yield depends on the economic result of the issuer and is determined as a share in profits specified in advance (Johnson, 2010). This debt financing source has, in this respect, features that are similar to those of the equity financing sources (Hutchison et al, 2016;Svedik & Tetrevova, 2015). Unlike the stockholders, the holders of these securities are in the position of a creditor.…”

Section: Literature Review and Hypothesesmentioning

confidence: 99%

“…Subordinated bonds represent corporate bonds connected with the right to settlement of liabilities (redemption of the nominal value and disbursement of the adequate yield) in the case of winding-up only after settlement of liabilities towards any other creditors, except liabilities with the same condition of subordination (Conlon & Cotter, 2014;Svedik & Tetrevova, 2015). At the same time, the holders of subordinated bonds are satisfied before the providers of the equity capital (Iannotta, 2010).…”

Section: Literature Review and Hypothesesmentioning

confidence: 99%

Mezzanine Financing Instruments in Comparison to the Classic Financing Sources

Tetrevova

Svedik

2018

Business, Management and Education

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The paper deals with innovated financing in the form of mezzanine financing instruments (sources). The authors aimed to identify, characterize, and assess mezzanine financing instruments in comparison to the classic corporate financing sources. Mezzanine financing represents an innovated form of financing interconnecting the features of equity and debt. The paper specifies the sources and characterizes and assesses pros and cons of each of them. Subsequently, it presents an overall evaluation of mezzanine financing instruments in comparison to the selected equity and debt financing sources. This evaluation was performed on the basis of 14 set criteria using a binary scale.

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“…Mezzanine capital represents a hybrid form of financing combining the features of equity and debt (Svedik & Tetrevova, 2015;Welz, 2006;Konecny, 2013). As for the financial concept, it refers to a financial source that is inserted into a corporation's capital structure between the "floor" of equity and the "ceiling" of senior, secured debt (Anson, Fabozzi & Jones, 2010).…”

Section: Mezzanine Financingmentioning

confidence: 99%

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2016

JEMI

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Use of Public Debt Mezzanine Instruments in the Czech Republic

Cited by 6 publications

References 8 publications

Investment valuation model for sustainable infrastructure systems

Investment valuation model for sustainable infrastructure systems

Mezzanine Financing Instruments in Comparison to the Classic Financing Sources

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