The use of mezzanine debt in European buyouts fell in 2003, according to the latest figures from ratings agency Fitch Ratings. Last year, about 35 deals were done with mezzanine debt, while in 2002, 40 deals used mezzanine debt. By value, the decrease was even more substantial, down 22.4% from EURO3.47 billion in 2002 to EURO2.7 billion in 2003.
Rachel Hardee, director of leveraged finance at Fitch Ratings, attributes the decrease in transactions to the improvement in high yield market conditions. She adds that much of the mezzanine issuance has been related to secondary buyout deals and recapitalizations.
By country, France maintained the strongest position in the mezzanine market, followed by the U.K. and Germany where mezzanine contributions still declined.