Prudential Capital Group: Types of Capital

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Bridging the gap between equity and senior debt, mezzanine capital typically comes in the form of subordinated debt with attached warrants.

Prudential Capital Group currently sponsors two mezzanine funds:

Prudential Capital Partners, L.P.

$619 million middle-market fund

Diverse group of 21 investors

Closed in July 2001 and fully
invested in May 2005

Prudential Capital Partners II, L.P.

$775 million middle-market fund

Diverse group of 22 investors

Closed in March 2005

Structural Characteristics
	Repayment of principal after senior debt has been fully amortized
	Combination of cash coupon and deferred interest
	Nominal warrants representing minority stake in issuer

Typical Size
	$10 million - $75 million

Typical Uses
	Recapitalizations
	Expansion/growth capital
	Sponsored and sponsorless buyouts
	Acquisitions

Issuer Benefits
	Patient capital supporting long-term growth
	Less costly than direct equity issuance
	Attractive alternative to an outright sale of the business
	Structural flexibility

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