Mezzanine capital and corporate bonds - the Czech experience

Abstract

The paper is dedicated to the problems of mezzanine financing focussing on the specific types of corporate bonds. The first part defines the term mezzanine capital in the alternative concept and characterizes the properties of mezzanine financing. Next, the paper discusses possible instruments of mezzanine financing, which are also briefly characterized. Further on, the attention is focussed on the mezzanine financing instruments in the form of securities that can be taken into consideration in the conditions of the Czech Republic, i.e. convertible bonds, warrant bonds and preferred stocks. In the end, the paper analyses and evaluates the situation in using corporate, convertible and warrant bonds in the Czech Republic, and at the same time it identifies the key risk factors causing their limited application and also specifies potential change proposals leading to improvements in the given situation.