
Subordinated debt may be provided by investors as part of their equity invest-
ment (for the reasons set out in 12.7.2); as between lenders and investors, such
debt is treated in the same way as equity.
Other subordinated debt (often referred to as “mezzanine debt” in this con-
text) may be provided by third parties, usually non-bank investors, such as insur-
ance companies or specialized funds, in cases where either there is a gap between
the amount that senior lenders are willing to provide and the total debt require-
ments of the project, or in lieu of part of the equity to produce more competitive
pricing for the Project Company’s output or service. ...