Document background
The Mezzanine Debt Term Sheet is a crucial document used in the preliminary stages of structuring sophisticated financing arrangements in Australia. It is typically employed when companies require additional funding beyond traditional senior debt but are not ready or willing to issue pure equity. This document sets out the proposed terms and conditions of the mezzanine facility, including the quantum, pricing, security package, and key protections for the lender. It serves as a roadmap for the transaction and forms the basis for negotiating the final facility documentation. The term sheet must comply with Australian financial services regulations and security laws, particularly the Corporations Act 2001 and the Personal Property Securities Act 2009. While not typically legally binding (except for certain provisions such as confidentiality and exclusivity), it represents a moral commitment by the parties to proceed with the transaction on the outlined terms.
